Nigeria, World Bank cancel $717.7 million power sector funds amid worsening blackouts
By Aboki Forex —
The federal government and the World Bank have jointly cancelled $717.7 million in undisbursed funds meant for electricity sector reforms. The money was part of the $1.52 billion Power Sector Recovery Programme (PSRP) designed to stabilise the national grid and improve revenue collection.
The cancellation comes as millions of Nigerians continue to suffer frequent blackouts and rising electricity tariffs. The World Bank said changes in Nigeria’s macroeconomic conditions made it difficult for the programme to meet its original goals. Since the programme was approved in 2023, the gap between revenue generated by the power sector and the funds needed to sustain operations widened significantly.
The Bank stated that the decision was taken jointly with the government to redirect resources toward more realistic projects. Future interventions will focus on boosting operational efficiency, improving revenue recovery, and reducing long-standing imbalances in the sector.
Programme ends earlier than planned
The programme was initially expected to run until June 2027. According to a BusinessDay report, it will now end much earlier.
Energy expert Yakubu Usman blamed weak policy coordination and poor implementation for the failed outcomes. He argued that reforms have focused too much on legislation while ignoring practical issues in generation, transmission, and distribution. “These are the same problems we discussed years ago,” Usman said, pointing to generation shortages, gas supply constraints, transmission bottlenecks, and liquidity crises.
BudgIT Deputy Director Vahyala Kwaga warned that the withdrawal of such a large funding package could delay improvements in electricity infrastructure. He said Nigeria already struggles to meet growing energy demand. Losing the investment will keep energy costs high for households and businesses.
The cancellation highlights the deep-rooted challenges in Nigeria’s electricity sector. While the World Bank insists the move allows resources to go to more effective projects, stakeholders fear it will slow the pace of reforms. For millions of Nigerians without reliable power, the development underscores the urgent need for practical solutions and sustained investment.