The Federal Government has cancelled $717.7 million in undisbursed financing from the World Bank meant for Nigeria’s struggling electricity sector, effectively bringing an end to the remaining portion of the $1.52 billion Power Sector Recovery Programme (PSRP).
The decision marks a major setback for efforts aimed at stabilising Nigeria’s fragile power industry, which has continued to battle liquidity problems, inadequate infrastructure, mounting debts, and persistent tariff controversies.
The cancelled funds were part of a broader World Bank-backed intervention designed to support reforms in the power sector, improve electricity distribution, strengthen transmission infrastructure, and address longstanding financial imbalances within the industry.
Sources familiar with the development said the cancellation followed growing concerns over implementation delays, worsening financial pressures, and the inability of key stakeholders in the sector to meet critical reform conditions tied to the funding arrangement.
Nigeria’s electricity sector has remained heavily burdened by tariff shortfalls, with the Federal Government spending huge sums on subsidies to bridge the gap between actual electricity costs and what consumers pay. Despite repeated tariff adjustments, power generation and supply have continued to fluctuate, while electricity distribution companies struggle with revenue collection and infrastructure deficits.
Industry analysts warn that the cancellation of the undisbursed funds could further complicate ongoing efforts to revive the sector, particularly at a time when power generation remains unstable and millions of Nigerians continue to experience frequent blackouts.
The Power Sector Recovery Programme was originally introduced to support operational improvements, reduce sector debts, attract private investment, and improve service delivery across the electricity value chain. However, implementation challenges and policy inconsistencies have slowed progress over the years.
The latest development is expected to raise fresh concerns among investors and development partners over the pace of reforms in Nigeria’s power sector, which has repeatedly been described as one of the biggest constraints to economic growth.
As of the time of filing this report, the Federal Government has yet to issue an official statement detailing the full circumstances surrounding the cancellation of the remaining World Bank financing.
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