The World Bank Group has thrown its weight behind reforms to Nigeria’s electricity tariff and subsidy frameworks, as the country’s power sector grapples with an estimated $2.45bn tariff shortfall.
The World Bank disclosed this in its Country Partnership Framework for the Federal Republic of Nigeria covering the 2026–2032 fiscal period.
The development finance institution said the reforms were necessary to restore financial sustainability in the electricity sector while improving access and reliability for households and businesses.
According to the framework, the World Bank’s intervention will support reforms focused on tariff and subsidy frameworks, competitive investment planning and sound 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,” the bank stated.
The World Bank said Nigeria currently has the world’s largest electricity access deficit, with more than 86 million people without access to electricity.
It noted that persistent power outages had forced households and businesses to depend heavily on expensive generators, thereby increasing operating costs and undermining productivity.
The bank further stated that the financial position of Nigeria’s electricity sector remained unsustainable, with tariff shortfalls estimated at $2.45bn by the end of 2025.
It said its support would facilitate the mobilisation of private capital for renewable energy expansion and grid densification, with the aim of improving the resilience of the power sector while advancing affordability and access.
The World Bank also said it would continue supporting the Nigeria Distributed Access through Renewable Energy Scale-up platform, designed to catalyse private investment in mini-grids and standalone solar systems.
The institution 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.
The support, it said, would include project preparation, transaction structuring and transparent competitive processes aimed at attracting private investors into the sector.
The World Bank projected that its combined off-grid and on-grid interventions under the framework would provide electricity access to more than 32 million Nigerians.
The six-year partnership framework comes amid renewed efforts by the Federal Government and electricity sector regulators to tackle the liquidity crisis in the power industry and improve electricity supply.
For years, the Federal Government has maintained electricity tariffs below the cost of supply, creating tariff shortfalls that have contributed to liquidity challenges across the sector.
The World Bank’s backing of tariff and subsidy reforms is expected to form part of broader efforts to establish a financially sustainable electricity market while encouraging greater private-sector participation.
The bank, however, said its planned investments and technical assistance would also focus on expanding access and improving affordability, particularly through renewable energy and distributed power solutions.