Nigeria’s electricity crisis seems to have worsened after the Federal Government cancelled $717.7 million in undisbursed World Bank financing meant to support reforms and improve power supply across the country.
The cancellation, confirmed in World Bank restructuring documents, effectively ends the remaining portion of the $1.52 billion Power Sector Recovery Programme introduced to restore financial stability in the electricity sector, reduce tariff shortfalls and improve supply reliability.
According to the World Bank, the decision followed a request by the Federal Government and a joint agreement by both parties to discontinue the programme after key reform conditions failed to materialise within the expected timeframe.
“The restructuring will result in the cancellation of the entire undisbursed balance in the amount of $717.7m equivalent, and no further disbursements will be made under the programme,” the bank stated.
The development raises fresh concerns over worsening blackouts and mounting pressure on Nigeria’s already fragile electricity sector, which continues to battle poor distribution performance, transmission bottlenecks, inadequate cost recovery and persistent liquidity challenges.
The programme, approved in June 2020 with an initial financing package of about $752.5 million, was designed to improve electricity supply reliability, strengthen financial sustainability in the power sector and enhance accountability among key institutions.