The Federal Government of Nigeria has officially cancelled $717.7 million in undisbursed financing from the World Bank intended for the country's electricity sector, thereby terminating the remaining portion of the $1.52 billion Power Sector Recovery Programme. This decision, prompted by a formal request from the government, was attributed to ongoing tariff shortfalls, increasing financial pressures, and the inability to achieve critical reform milestones. As a result, the programme's closing date has been advanced from June 30, 2027, to May 31, 2026, with no further disbursements planned. Although the original programme, initiated in 2020, achieved a significant reduction in tariff shortfalls, the additional financing approved in 2023 faced severe challenges, including the depreciation of the naira and rising gas costs, leading to a dramatic increase in tariff shortfalls.
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