The World Bank and the Nigerian government have cancelled a $717.7 million loan facility designed to support reforms in the country’s troubled electricity sector.
The cancelled balance formed part of the $1.52 billion Power Sector Recovery Programme launched to improve electricity supply, strengthen sector finances, and reduce pressure on public funds.
According to the World Bank, the programme will end earlier than expected, with no further disbursement after approval of the restructuring.
The institution blamed persistent structural challenges, including weak power distribution, transmission bottlenecks, financial instability, and rising tariff shortfalls.
The bank also linked the crisis to the depreciation of the naira following the liberalisation of Nigeria’s foreign exchange market in 2023, which increased the cost of gas used for power generation.
Despite previous reforms, only nine per cent of the additional financing package was disbursed before the cancellation was approved.
