Nigeria’s electricity sector has received at least $3.653 billion in World Bank-backed funding over the past 24 years, yet millions of households and businesses across the country continue to grapple with unstable power supply, frequent national grid collapses and an overwhelming reliance on generators.
An analysis of World Bank-supported electricity projects between 2001 and 2024 shows that successive interventions targeted transmission upgrades, sector reforms, rural electrification, renewable energy expansion and recovery programmes designed to stabilise Nigeria’s struggling power industry.
According to data from the World Bank, as highlighted by Statisense, major interventions include the $100 million Transmission Development Project launched in 2001, the $172 million National Energy Development Project in 2005 and the $400 million Nigeria Electricity and Gas Improvement Project introduced in 2009.
Other projects include the $145 million Nigeria Power Sector Guarantees Project in 2014, the $486 million Nigeria Electricity Transmission Project in 2018, the $350 million Nigeria Electrification Project also launched in 2018, the $750 million Power Sector Recovery Programme approved in 2020, the $750 million Distributed Access through Renewable Energy Scale-up Programme introduced in 2023 and the $500 million Sustainable Power and Irrigation for Nigeria Project launched in 2024.
Collectively, the projects account for approximately $3.653 billion in funding, excluding regional interconnector and hydro rehabilitation initiatives whose financial details were not disclosed.
Electricity Challenges Persist Despite Billions in Funding
Despite the substantial investments, Nigeria’s electricity supply remains inadequate for its growing population and expanding industrial sector.
The national grid continues to experience repeated collapses, while power generation has remained below the level required to meet national demand. As a result, households and businesses still depend heavily on petrol and diesel generators due to unreliable electricity supply from distribution companies.
Industry experts have attributed the persistent crisis to weak transmission infrastructure, liquidity challenges within the power market, gas supply constraints, vandalism, inadequate investment and policy inconsistencies.
Shift Towards Renewable Energy Solutions
The pattern of interventions reflects a gradual shift in the World Bank’s strategy from conventional transmission and gas-focused projects toward renewable energy and decentralised electricity access.
Recent programmes such as the Distributed Access through Renewable Energy Scale-up initiative and the Sustainable Power and Irrigation for Nigeria Project are designed to expand solar-powered electricity access, particularly in rural and underserved communities.
The World Bank has maintained that these initiatives are intended to improve electricity access, strengthen transmission infrastructure and support reforms capable of attracting private sector investment into Nigeria’s power sector.
However, concerns remain regarding the pace of implementation and the actual impact of these interventions on electricity consumers nationwide.
Businesses Continue to Face High Energy Costs
Businesses across Nigeria continue to cite rising energy costs as one of their biggest operational challenges, with manufacturers spending significant amounts on self-generation due to unreliable grid power.
The persistent electricity crisis has also negatively affected productivity, healthcare delivery, small businesses and overall living conditions across the country.
Stakeholders argue that Nigeria’s continued dependence on donor-backed interventions highlights the depth of structural challenges facing the power sector, more than a decade after the privatisation of electricity generation and distribution companies.
While the interventions have contributed to infrastructure development and improved electricity access in some communities, a stable and reliable nationwide electricity supply remains largely elusive.
Federal Government Cancels $717.7m World Bank Facility
The development comes after the Federal Government cancelled $717.7 million in undisbursed World Bank financing earmarked for Nigeria’s electricity sector.
Documents obtained from the World Bank revealed that the cancellation affected the remaining balance of a $1.52 billion Power Sector Recovery Programme following a joint decision by both parties to discontinue financing due to evolving sector realities and challenges in meeting key reform milestones.
According to the World Bank restructuring paper, the entire undisbursed balance was cancelled, while the programme’s closing date was moved forward from June 30, 2027, to May 31, 2026.
Expert Blames Corruption, Governance Failures
Reacting to the situation, Professor of Energy at the University of Lagos, Dayo Ayoade, blamed corruption and poor governance for Nigeria’s persistent electricity challenges.
According to him, the country’s economy will continue to suffer unless decisive reforms are implemented within the power sector.
“Until the power sector is fixed, Nigerians and the economy will continue to suffer. Self-generation is inefficient and expensive for households and businesses,” he said.
Ayoade called for comprehensive reforms, improved governance, stronger accountability mechanisms and the gradual removal of electricity subsidies to ensure tariffs reflect the true cost of power generation and distribution.
He also warned against the proliferation of institutions within the sector, stressing the need for streamlined operations and stronger anti-corruption measures.
“Billions of dollars have been spent on power projects over the years with little improvement in electricity supply. We must address governance failures, leakages and corruption if we are serious about solving Nigeria’s electricity crisis,” he added.
