The World Bank Group has pledged to support reforms to Nigeria’s electricity tariff and subsidy frameworks as part of measures to restore financial sustainability in the power sector.
The commitment was contained in the World Bank’s Country Partnership Framework (CPF) for Nigeria, covering the 2026–2032 fiscal period.
Under the six-year framework, the bank said it would support efforts to expand electricity access and improve reliability for households and businesses through both on-grid and off-grid solutions, in line with the targets of Nigeria’s Mission 300 Compact.
“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 said Nigeria currently had the world’s largest electricity access deficit, with more than 86 million people lacking access to electricity.
It noted that persistent power outages had compelled households and businesses to depend heavily on costly generators, a situation it said had adversely affected the productivity of firms.
The bank also raised concerns over the financial health of the electricity sector, putting tariff shortfalls at an estimated $2.45 billion by the end of 2025.
According to the development finance institution, its planned interventions would help mobilise private capital for renewable energy expansion and grid densification, while improving the resilience of the power sector and promoting affordability and wider access.
The World Bank said it would also continue supporting the Nigeria Distributed Access through Renewable Energy Scale-up platform, designed to attract private investment into mini-grids and standalone solar systems on a large scale.
It added that it would assist the Federal Government in developing structured public-private partnerships and private investment frameworks across the generation, transmission and distribution segments of the electricity market.
The support, it said, would cover project preparation, transaction structuring and transparent competitive processes aimed at attracting private investors.
“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 intervention comes amid ongoing efforts by the Federal Government and electricity sector regulators to tackle the financial challenges facing the industry and improve power supply across the country.
The proposed tariff and subsidy reforms are expected to form part of broader measures aimed at establishing a financially sustainable electricity market, while World Bank investments and technical assistance would encourage greater private-sector participation.
For years, the Federal Government maintained electricity tariffs below the actual cost of supply, leaving a gap between the amount paid by consumers and the cost of electricity.
The failure to fully settle the resulting tariff shortfalls has contributed significantly to the liquidity crisis affecting the power sector.
However, the Minister of Power, Joseph Tegbe, has said the government expects to address the sector’s liquidity challenges next year.
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