PSRP Policy Summary

What Is This Policy?

The Power Sector Recovery Programme (PSRP) is Nigeria’s comprehensive multi-year reform framework to restore the financial viability of the Nigerian Electricity Supply Industry (NESI), improve power supply reliability, and RESET the electricity market for long-term growth. Approved by the Federal Executive Council in March 2017 and developed with World Bank Group support, the Programme comprises 17 carefully designed interventions across four pillars — financial, operational/technical, governance, and policy — to be implemented over five years, ending chronic sector cash deficits, restoring investor confidence, and delivering reliable electricity to Nigerian homes, businesses, and industries.

Who Does It Target?

Electricity Distribution Companies (DisCos) responsible for last-mile delivery and revenue collection from consumers Power Generation Companies (GenCos) and Independent Power Producers (IPPs) supplying electricity to the national grid The Transmission Company of Nigeria (TCN) operating and expanding the national transmission network Nigerian Bulk Electricity Trading Plc (NBET) acting as the bulk electricity trader between GenCos and DisCos Nigerian Electricity Regulatory Commission (NERC) responsible for sector regulation, tariff orders, and enforcement Federal and state Ministries, Departments and Agencies (MDAs) as electricity consumers and governance actors Private sector investors, development finance institutions, and international development partners Nigerian electricity consumers — households, industries, commercial businesses, and off-grid communities

What Does It Aim to Achieve?

Restore the Nigerian power sector’s financial viability by eliminating chronic tariff shortfalls and historical sector cash deficits of NGN 420 billion (2015–2016) Improve power supply reliability — achieving a minimum daily baseline of 4,500 MWh/hour distributed to the national grid by 2018, rising to 6,182 MWh/hour by 2021 Strengthen the sector’s institutional framework, increase transparency, and enforce performance standards across all market participants Implement clear fiscal, monetary, and regulatory policies that promote and encourage private sector investor confidence in the power sector Establish a fully functional contract-based electricity market, with effective Power Purchase Agreements and a path to bilateral trading

Key Features

Cost-Reflective Tariff RESET: NERC to conduct a comprehensive MYTO major review (Reset), determining revenue requirements for all DisCos and TCN; tariff trajectory defined to reach full cost recovery by 2021, with automatic adjustments for forex and inflation NGN 1.934 Trillion Financing Plan: FGN committed to a fully funded five-year Financing Plan covering NGN 1.15 trillion future tariff shortfalls, NGN 420 billion historical deficit (2015–2016), and NGN 363 billion CBN Payment Assurance Facility debt service CBN Payment Assurance Facility: NGN 701.9 billion CBN bridge facility guaranteed by FMoF to support NBET’s payment obligations to GenCos and gas suppliers during the transitional period 2017–2018 DisCo Performance Improvement Plans: Each of the 11 DisCos required to submit NERC-approved Performance Improvement Plans (PIPs) with binding investment targets, metering programmes, ATC&C loss reduction, and business continuity measures 4,500 MW Baseline Target: A minimum daily generation and distribution baseline of 4,500 MWh/hour to be achieved from 2018, requiring resolution of gas supply constraints, transmission bottlenecks, and distribution system deficiencies Gas-to-Power Security: 800 MMscf/day gas supply secured to support 4,500 MW of thermal generation; pipeline vandalism addressed; gas supply agreements with all 24 GenCo contracts made legally effective Governance & Transparency: Qualified boards appointed to state agencies and DisCos; operational and financial KPIs published online by NERC quarterly; DisCo invoice remittances tracked publicly; Freedom of Information Act compliance required World Bank Co-Financing: Up to US$2.6 billion World Bank Group support: US$1 billion performance-based loan, US$500 million distribution loss reduction, US$486 million TCN transmission, US$350 million rural electrification, and US$305 million IBRD guarantees

Current Status

Rollout Stage: Active — FEC-approved March 2017; PSRP Secretariat established in the Budget Office of the Federation; World Bank Power Sector Recovery Operation (PSRO) of US$750 million and Distribution Sector Recovery Programme (DISREP) of US$500 million approved between June 2020 and February 2021 Tariff Reform: MYTO major review (Reset) completed; NERC issued Performance Improvement Plans for all 11 DisCos covering 2020–2024; Extraordinary MYTO review effective January 2022; sector maintained 96.4% cost recovery since February 2022 Deficit Reduction: Tariff shortfalls reduced by 53% between 2019 and 2021; DisCo remittances to NBET rose from 28% in 2018 to 80% in 2021; Minimum Remittance Obligations enforced by NERC from July 2020 MDA Debt Settlement: NGN 40 billion included in 2017 federal budget to clear NGN 26 billion verified MDA electricity debts; automated MDA payment mechanism implemented Generation Baseline: September 2017 peak generation reached 5,075 MW; installed capacity in operation confirmed at 7,223 MW; PSRP energy planning target of 4,500 MWh/hour daily baseline progressively met Electricity Act 2023: The Electricity Act 2023 superseded the EPSRA 2005, deepening sector reforms by enabling state-level electricity markets, deregulating generation and distribution, and providing a new framework for independent power production

How to Access

DisCos & GenCos: Engage NERC for MYTO Reset tariff determination and PIP submission; apply for performance-based financing support through NBET and the World Bank DISREP programme Private Investors: Access fiscal incentives including duty waivers and pioneer status for power sector investments; pursue IBRD guarantees for generation and distribution projects via the World Bank Rural & Off-Grid Investors: Apply to the Rural Electrification Agency (REA) for funding and approvals under the Rural Electrification Strategy and Implementation Plan (RESIP); access the Solar Mini-Grid and off-grid electrification fund MDAs: Comply with the FGN directive on automated electricity bill payments; engage NERC for MDA bill management; access the MDA arrears settlement mechanism Contact: PSRP Secretariat, Budget Office of the Federation, Federal Ministry of Finance, 816 Ahmadu Bello Way, Central Business District, Abuja | psrp.com.ng | Federal Ministry of Power: power.gov.ng

Important Terms

MYTO (Multi-Year Tariff Order): NERC’s regulatory tariff framework setting allowed revenue requirements for DisCos and TCN over multi-year periods; subject to major (Reset) and minor (automatic) reviews ATC&C Losses: Aggregate Technical, Commercial and Collection losses — the total energy and revenue lost through theft, technical faults, and uncollected bills; DisCos’ weighted average ATC&C loss was 54.3% in 2016 versus MYTO target of 32.1% Tariff Shortfall: The gap between cost-reflective electricity tariffs and the lower tariffs actually charged to consumers; FGN must fund this difference annually until cost recovery is achieved Payment Assurance Facility: A CBN short-term bridge loan of NGN 701.9 billion guaranteed by FMoF, channelled through NBET to pay GenCos and gas suppliers pending tariff normalisation PSRP IMT: The PSRP Implementation Monitoring Team, reporting to the Vice President, responsible for monitoring PSRP implementation, quarterly Financing Plan updates, and public reporting

Impact & Metrics

Nigeria’s chronic power deficit costs the national economy an estimated US$25 billion in GDP annually; the PSRP targets elimination of this structural drag through restored sector viability Nigeria has 13,400 MW of installed generation capacity but only an average of less than 4,000 MW was dispatched to consumers between 2015 and 2017 — less than 30% of installed capacity 43% of Nigeria’s population (approximately 85 million people) lack access to grid electricity; the PSRP’s off-grid and rural electrification pillar targets connecting 500,000–800,000 households per year to reach universal access by 2030 The NGN 1.934 trillion (US$6.34 billion) Financing Plan is the largest single-programme fiscal commitment to Nigeria’s power sector, backed by World Bank co-financing of up to US$2.6 billion

Official Resources

Website: psrp.com.ng | power.gov.ng | nerc.gov.ng | nbet.com.ng Policy Document: Power Sector Recovery Programme 2017–2021 — available via the Federal Ministry of Power and the Budget Office of the Federation Contact: PSRP Secretariat, Budget Office of the Federation, Federal Ministry of Finance, Budget and National Planning, Abuja, Nigeria Summary prepared using the Policy Summary Template | Source: PSRP Master Document January 2018 (All-On / FGN), World Bank PSRO Documentation 2020–2023, Electricity Act 2023, NERC | March 2026

Legal Framework

Operates under the Electric Power Sector Reform Act (EPSRA) 2005, the Nigerian Electricity Regulatory Commission (Establishment) Act, and the Electricity Act 2023 which updated the sector framework. Implementation is supported by the privatisation framework under the Public Enterprises (Privatisation and Commercialisation) Act and the World Bank Performance-Based Contracts. Sector participants operate under NERC licences and applicable multi-year tariff orders.