The Federal Government has cancelled $717.7 million in undisbursed financing from the World Bank for Nigeria’s troubled electricity sector, effectively ending the remaining portion of a $1.52 billion power sector recovery programme amid mounting tariff shortfalls, worsening financial pressures, and persistent implementation challenges.
Documents obtained from the World Bank website showed that the cancellation followed a formal request by the Federal Government and a joint decision by both parties to discontinue financing under the Power Sector Recovery Performance-Based Operation.
According to the documents, the decision was linked to evolving realities in the power sector and the inability to achieve key reform milestones under the programme.
The World Bank, in its restructuring paper, stated that the cancelled amount represented the entire undisbursed balance remaining under the initiative.
“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 following approval of this restructuring,” the bank stated.
The financial institution also disclosed that the programme’s closing date had been moved forward from June 30, 2027, to May 31, 2026, effectively ending the operation more than a year ahead of schedule.
The cancelled facility was part of a broader World Bank intervention aimed at reviving Nigeria’s struggling electricity sector, which has continued to face recurring blackouts, liquidity challenges, and infrastructure deficits.
The development comes amid growing concerns over the state of the nation’s power supply, rising electricity tariffs, and the financial sustainability of operators within the industry.
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