FG, World Bank cancel $717.7m power sector loan

The Federal Government and the World Bank have agreed to cancel $717.7 million in undisbursed financing under Nigeria’s Power Sector Recovery Operation programme due to tariff shortfalls, implementation delays and changing realities in the electricity sector.

The World Bank and the Federal Government have agreed to cancel about $717.7 million in undisbursed financing under the Power Sector Recovery Operation (PSRO) programme. According to a restructuring paper obtained by TheCable on Tuesday, the decision followed worsening tariff shortfalls, implementation delays and changing realities within Nigeria’s electricity sector. The document stated that the development came after a formal request by the federal government on March 26, 2026, seeking to discontinue financing under the programme and close the operation ahead of schedule.

The latest development comes weeks after the Office of the Accountant-General of the Federation denied reports that it threatened to cancel World Bank loans with delayed approvals exceeding six months. In the restructuring paper, the World Bank said, “The proposed Level Two restructuring is undertaken in response to a formal request from the Federal Government of Nigeria (FGN), received on March 26, 2026.”

The document further stated that “The restructuring will result in the cancellation of the entire undisbursed balance in the amount of US$717.7 million equivalent, and no further disbursements will be made under the Program following approval of this restructuring.” It added that the programme’s closing date would also be moved forward from June 30, 2027, to May 31, 2026, to allow for the completion of disbursement activities before the operation proceeds toward formal closure in line with World Bank procedures.

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