The World Bank Group has said it will support reforms to Nigeria’s electricity tariff and subsidy frameworks as part of broader efforts to restore financial sustainability in the country’s power sector.
This was disclosed in the World Bank’s Country Partnership Framework for the Federal Republic of Nigeria, covering the period FY26-FY32.
According to the document, the World Bank’s intervention will focus on improving electricity access and reliability for households and businesses through both on-grid and off-grid solutions, in line with Nigeria’s Mission 300 Compact targets.
“The WBG will also support reforms to restore financial sustainability, focusing on tariff and subsidy frameworks, competitive investment planning, and sound sector regulation,” the document stated.
The World Bank noted that Nigeria currently has the world’s largest electricity access deficit, with more than 86 million people lacking access to power.
It said frequent power outages have forced households and businesses to depend on costly generators, a situation that has weighed heavily on the productivity of firms.
The development finance institution further stated that the electricity sector’s financial position remains unsustainable, with tariff shortfalls estimated at $2.45bn by the end of 2025.
Mobilising Private Capital
The World Bank said its support would help mobilise private capital for renewable energy expansion and grid densification, aimed at strengthening the resilience of the power sector while improving affordability and access.
It added that it would continue backing the Nigeria Distributed Access through Renewable Energy Scale-up platform, which it said is designed to catalyse private capital for large-scale investments in mini-grids and standalone solar systems.
The bank also said it would assist the Federal Government in developing well-structured public-private partnerships and private investment frameworks across the generation, transmission and distribution segments of the sector.
This support, it noted, would include project preparation, transaction structuring and transparent competitive processes to attract private investors.
“Together, these off- and on-grid efforts under the CPF will provide electricity access to over 32 million Nigerians,” the document stated.
Ongoing Reforms
The World Bank’s six-year framework comes as the Federal Government and electricity sector regulators continue efforts to address the financial challenges confronting the power industry and improve electricity supply nationwide.
The bank said the planned tariff and subsidy reforms would form part of broader measures aimed at building a financially sustainable electricity market, while its investments and technical assistance would support greater private sector participation in the industry.
For years, the Federal Government froze electricity tariffs, allowing consumers to pay less than the actual cost of their consumption. The government’s failure to fully settle the resulting shortfalls as promised has been identified as a major driver of the liquidity crisis plaguing the power sector.
However, the Minister of Power, Joseph Tegbe, has said the sector’s liquidity challenges would be addressed next year.
