Power crisis persists despite $3.6bn World Bank support – Report

Nigeria’s electricity challenges remain unresolved despite receiving over $3.6bn in funding from the World Bank over the past two decades, a new report has revealed.

An analysis of World Bank-backed power projects between 2001 and 2024 shows that a total of $3.653bn was invested in efforts to stabilise the sector. These interventions covered transmission upgrades, rural electrification, renewable energy expansion, and reform programmes aimed at strengthening the industry.

Key projects include the $100m Transmission Development Project (2001), $172m National Energy Development Project (2005), and the $400m Nigeria Electricity and Gas Improvement Project (2009). Others are the $145m Power Sector Guarantees Project (2014), $486m Nigeria Electricity Transmission Project (2018), $350m Nigeria Electrification Project (2018), $750m Power Sector Recovery Programme (2020), $750m Distributed Access through Renewable Energy Scale-up initiative (2023), and the $500m Sustainable Power and Irrigation for Nigeria project (2024).

Despite these investments, electricity supply across the country remains unreliable. Frequent grid collapses, weak transmission infrastructure, and generation shortfalls continue to affect millions of households and businesses, many of which still depend on petrol and diesel generators.

Experts attribute the persistent crisis to deep-rooted structural issues, including liquidity constraints in the power market, gas supply limitations, vandalism, policy inconsistencies, and inadequate investment.

Recent World Bank programmes reflect a strategic shift towards decentralised and renewable energy solutions, particularly solar-powered electricity for underserved and rural communities. However, stakeholders say the impact of these initiatives has been slow and insufficient to meet national demand.

The situation has also placed a heavy financial burden on businesses, with manufacturers and small enterprises spending significantly on self-generated power due to unreliable grid supply.

In a related development, the Federal Government recently cancelled $717.7m in undisbursed funding under a $1.52bn World Bank-backed Power Sector Recovery Programme. According to official documents, the cancellation followed a joint decision by both parties after key reform targets were not met.

The restructuring also brought forward the programme’s closing date from June 2027 to May 31, 2026, effectively ending the initiative earlier than planned.

Reacting to the development, a Professor of Energy at the University of Lagos, Dayo Ayoade, blamed corruption and weak governance for the sector’s continued struggles.

He warned that Nigeria’s economy would keep suffering unless comprehensive reforms are implemented, noting that reliance on self-generation is both inefficient and costly for individuals and businesses.

Ayoade called for a complete overhaul of the power sector, including the removal of electricity subsidies, improved transparency, and better management of resources. He also criticised the proliferation of agencies in the sector, urging the government to streamline institutions and plug financial leakages.

According to him, achieving stable electricity supply will require tough policy decisions, including cost-reflective tariffs and stronger government leadership.

Stakeholders maintain that while donor-backed interventions have improved access in some areas, a reliable and nationwide power supply remains largely out of reach, underscoring the depth of Nigeria’s electricity sector challenges.