adsNigeria’s electricity sector has suffered a major setback following the joint decision by the Federal Government and the World Bank to cancel $717.7 million in undisbursed financing intended to stabilise the national grid.
The cancellation of the remaining portion of the $1.52 billion Power Sector Recovery Programme comes amid worsening blackouts, with industry experts warning that weak policy direction and implementation challenges continue to hinder progress in the sector.
The World Bank, in its restructuring paper for the ‘Power Sector Recovery Performance-Based Operation’, said that since its approval in 2023, Nigeria’s power sector (operating environment) has evolved significantly, with macroeconomic developments contributing to a sharp increase in tariff shortfalls and the scale of financing required to support sector recovery.
This, according to the bank, has widened the gap between sector revenues and required funding levels, thereby affecting the pace and sequencing of reforms envisaged under the program. Accordingly, the program, originally scheduled to run until June 2027, has been abruptly shortened to terminate this month.
According to the Bank, the cancellation of the undisbursed balance of the operation is proposed as a pragmatic step to enable a reorientation of support toward instruments that are better aligned with current sector priorities and implementation realities.adsads
