Despite Loans, Nigeria Lacks Stable Electricity. Nigerians still grapple with unstable electricity despite billions being allocated by the government and World Bank loans.
KaNo —
The Nigeria’s electricity sector has received at least a $3.653bn loan from the World Bank over the past 24 years. Despite the loans received, millions of households and businesses across the country continue to grapple with unstable power supply, frequent grid collapses, and heavy reliance on solar.
An analysis of World Bank-supported power projects between 2001 and 2024 revealed that the interventions targeted transmission upgrades, sector reforms, rural electrification, renewable energy expansion, and recovery programmes aimed at stabilising the country’s troubled electricity industry.
According to reports from Statisense, citing data from the World Bank said the projects include the $100m Transmission Development Project introduced in 2001, the $172m National Energy Development Project in 2005, and the $400m Nigeria Electricity and Gas Improvement Project launched in 2009.
Others projects include $145m Nigeria Power Sector Guarantees Project in 2014, the $486m Nigeria Electricity Transmission Project in 2018, the $350m Nigeria Electrification Project also in 2018, the $750m Power Sector Recovery Programme approved in 2020, the $750m Distributed Access through Renewable Energy Scale-up programme introduced in 2023, and the $500m Sustainable Power and Irrigation for Nigeria project launched in 2024.
The cumulative funding from the projects is estimated at $3.653 billion, excluding regional interconnector and hydro rehabilitation projects, for which exact figures were not stated.
Despite the multi-billion-dollar investments, Nigeria’s electricity supply has remained inadequate to meet its growing population’s needs and industrial demand.
The national grid has continued to suffer repeated collapses, while power generation has largely been below expectations for Africa’s most populous country.
Many households and businesses still depend heavily on petrol and diesel generators alongside solar-powered devices, due to unreliable supply from distribution companies.
Industry experts have repeatedly blamed the crisis on weak transmission infrastructure, liquidity shortfalls in the power market, gas supply constraints, vandalism, inadequate investment, and policy inconsistencies.
The interventions over the years also reflect a shift in the World Bank’s strategy from conventional transmission and gas-focused projects towards renewable energy and decentralised electricity .
According to Statisense, 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 underserved and rural communities.
However, concerns persist over the pace of implementation and the overall impact of the interventions on electricity consumers.
Businesses across Nigeria continue to cite high energy costs as a major operational challenge, with manufacturers spending huge sums on self-generation amid poor grid supply.
The persistent electricity crisis has also continued to affect productivity, small businesses, healthcare delivery, and living conditions nationwide.
Stakeholders said the continued dependence on donor-backed interventions underscores the depth of structural problems in the power sector, more than a decade after the privatisation of electricity generation and distribution companies.
They noted that while the interventions have helped expand infrastructure and improve electricity access in some areas, a stable and reliable nationwide power supply remains a dream for the teeming Nigerian populace.
The Federal Government had cancelled $717.7m in undisbursed World Bank financing for Nigeria’s troubled electricity sector, effectively terminating the remaining portion of a $1.52bn power sector recovery programme.
Documents available on the World Bank website on Monday showed that the cancellation followed a formal request by the Federal Government.
A joint decision had been reached by both parties to discontinue financing under the Power Sector Recovery due to evolving sector realities and the inability to achieve key reform milestones.
According to the World Bank restructuring paper, the cancelled amount represents the entire undisbursed balance remaining under the programme.“The restructuring will result in the cancellation of the entire undisbursed balance in the amount of $717.7m equivalent, and no further disbursements will be made under the programme following approval of this restructuring,” the bank stated
The bank also disclosed that the programme’s closing date had been brought forward from June 30, 2027, to May 31, 2026, ending the operation more than a year ahead of schedule.
Expert Blames Poor Governance Over Electricity Woes
A Professor of Energy, Dayo Ayoade, of the University of Lagos, in an interview with Channels TV in February, blamed corruption and poor governance for the country’s electricity woes.
According to him, the economy will continue to lose money and will not develop “provided we don’t take control of the power sector”.
Ayoade said there are too many loopholes and leakages, warning that the economy will continue to suffer because self-generation is too costly for the common man and small businesses.
“Until the power sector is put right, the economy will continue to suffer, Nigerians will continue to suffer, and there is no way out of this. Self-generation doesn’t work because it’s inefficient” he stated
