Nigeria, World Bank Cancel $717.7M Power Reform Funds

The Federal Government of Nigeria and the World Bank have jointly agreed to cancel $717.7 million in undisbursed financing for a major electricity reform program, effectively terminating the remaining portion of a $1.52 billion initiative. The decision, formalized in late March, moves the program's closing date forward by over a year to May 31, 2026, with no further funds to be released.

The program, known as the Power Sector Recovery Operation, was initially approved in June 2020 with $752.5 million in financing. Its goals were to improve electricity supply reliability, strengthen the financial sustainability of the power sector, and enhance accountability. Following reported progress, an additional financing package of approximately $763.5 million was approved in June 2023 to deepen reforms. Combined, the total commitment was about $1.52 billion.

According to World Bank documents, the original program achieved significant results. The bank reported a 71 percent reduction in tariff shortfalls between 2019 and 2022, a jump in regulatory cost recovery from 56 percent to 94 percent, and a 13 percent increase in annual electricity supplied to the national grid between 2018 and...