The Federal Government has cancelled $717.7 million in undisbursed financing from the World Bank earmarked for Nigeria’s electricity sector, effectively ending a major power sector recovery programme amid persistent financial and operational challenges.
According to documents obtained from the World Bank, the cancellation followed a formal request by the Nigerian government and a joint decision by both parties to discontinue funding under the Power Sector Recovery Performance-Based Operation (PSRP-PforR).
According to the bank, the move was influenced by changing realities within the electricity sector and difficulties in achieving critical reform targets outlined under the programme.
The World Bank stated that the cancelled amount represented the entire outstanding balance that had not yet been disbursed.
“The restructuring will result in the cancellation of the entire undisbursed balance in the amount of $717.7 million equivalent, and no further disbursements will be made under the programme following approval of this restructuring,” the institution stated.
The bank also disclosed that the programme’s completion date had been revised from June 30, 2027, to May 31, 2026, effectively bringing the initiative to an end more than a year earlier than originally planned.
The financing formed part of a broader intervention designed to address long-standing weaknesses within Nigeria’s electricity industry.
The original Power Sector Recovery Performance-Based Operation received approval on June 23, 2020, with financing valued at approximately $752.5 million. It was designed to improve the reliability of electricity supply, strengthen the financial sustainability of the power sector and enhance accountability across institutions within the electricity value chain.
