The World Bank Group has announced plans to support reforms to Nigeria’s electricity tariff and subsidy frameworks as part of efforts to restore financial sustainability in the country’s power sector.
The World Bank disclosed this in its Country Partnership Framework (CPF) for Nigeria covering the 2026–2032 fiscal period.
According to the framework, the intervention will focus on expanding electricity access and improving reliability for households and businesses through both on-grid and off-grid solutions, in line with Nigeria’s Mission 300 Compact targets.
The bank said it would also support reforms aimed at addressing the financial challenges in the electricity market, particularly through improvements to tariff and subsidy frameworks, competitive investment planning and stronger sector regulation.
“The WBG will also support reforms to restore financial sustainability, focusing on tariff and subsidy frameworks, competitive investment planning, and sound sector regulation,” it stated.
The World Bank noted that Nigeria has the world’s largest electricity access deficit, with more than 86 million people lacking access to electricity.
It added that persistent power outages had forced households and businesses to depend heavily on expensive generators, thereby increasing operating costs and undermining business productivity.
The bank said the financial position of Nigeria’s electricity sector remained unsustainable, with tariff shortfalls estimated at $2.45bn by the end of 2025.
Under the new framework, the World Bank said it would help mobilise private capital for renewable energy projects and grid expansion, with the objective of strengthening the resilience of the electricity system while improving affordability and access.
It also pledged continued support for the Nigeria Distributed Access through Renewable Energy Scale-up platform, which is designed to attract private investment into mini-grids and standalone solar systems.
The development finance institution said it would further assist the Federal Government in developing public-private partnerships and private investment frameworks covering electricity generation, transmission and distribution.
Its support, according to the framework, would include project preparation, transaction structuring and transparent competitive processes designed to attract private investors into the sector.
“Together, these off- and on-grid efforts under the CPF will provide electricity access to over 32 million Nigerians,” the bank stated.
The World Bank’s six-year framework comes amid ongoing efforts by the Federal Government and electricity sector regulators to address the liquidity crisis in the power industry and improve electricity supply.
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For years, the Federal Government maintained electricity tariffs below the cost of supply, resulting in substantial tariff shortfalls that required government intervention.
However, delays and shortfalls in settling the obligations contributed to mounting liabilities across the electricity market, worsening the liquidity challenges affecting generation and distribution companies.
The World Bank said its planned tariff and subsidy reforms would form part of broader measures to establish a financially sustainable electricity market, while its investments and technical assistance would support greater private-sector participation.
Minister of Power, Joseph Tegbe, has also said the liquidity challenges confronting the electricity sector would be addressed next year.
