The Federal Government has cancelled $717.7 million in undisbursed World Bank funding meant for Nigeria’s power sector recovery programme, amid growing tariff shortfalls, financial strain, and stalled reforms in the electricity industry.
According to documents obtained from the World Bank by The PUNCH, the cancellation followed a formal request by the Federal Government and a mutual agreement to discontinue the remaining financing under the Power Sector Recovery Performance-Based Operation.
The World Bank stated that the cancelled sum represents the full undisbursed balance under the programme, with no further disbursements to be made. It also revealed that the project’s closing date was moved forward from June 30, 2027, to May 31, 2026.
The intervention, originally approved in 2020 and later expanded in 2023, was designed to improve electricity supply, strengthen the sector’s financial sustainability, and boost accountability across the power value chain.
While the initial phase recorded significant progress, including a reduction in tariff shortfalls and improved cost recovery, the additional financing struggled due to worsening macroeconomic conditions, foreign exchange volatility, rising gas costs, and stalled reforms.
The World Bank noted that despite years of intervention, Nigeria’s electricity sector continues to battle weak distribution performance, transmission bottlenecks, and persistent financial imbalances.
