The Federal Government has cancelled $717.7 million in undisbursed World Bank financing for Nigeria’s power sector, effectively ending a major electricity reform programme.
The decision follows a joint agreement between both parties to discontinue the Power Sector Recovery Performance-Based Operation, after the government requested a restructuring due to difficulties in meeting key reform targets. The cancellation covers the entire remaining balance of a $1.52 billion programme designed to improve the financial viability and performance of the electricity sector.
According to the World Bank, the programme was originally approved in June 2020 and later expanded in 2023, but implementation challenges prevented the achievement of critical reform milestones. It said the operation has now been closed earlier than scheduled, with its end date moved from June 30, 2027, to May 31, 2026.
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The bank noted that while the original programme recorded significant progress, including improved tariff recovery and reduced sector losses, the additional financing failed to meet conditions due to rising costs, tariff shortfalls and structural constraints in the power sector.
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