The World Bank Group has expressed its readiness to support reforms in Nigeria’s electricity tariff and subsidy system as part of efforts to improve the financial health of the power sector.
The development was contained in the World Bank’s Country Partnership Framework for the Federal Republic of Nigeria, covering the 2026 to 2032 financial years. The framework outlines areas where the bank plans to work with Nigeria to strengthen economic development and improve access to essential services. According to the World Bank, its intervention in the electricity sector will focus on increasing access to reliable and affordable power for households and businesses across the country.
The bank said the reforms would support both on grid and off grid electricity solutions, in line with the objectives 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’s support comes as Nigeria continues to struggle with a major electricity supply gap. The institution said more than 86 million Nigerians currently lack access to electricity, making Nigeria the country with the largest electricity access deficit in the world. The situation has also placed significant pressure on households and businesses. Frequent power outages have forced many consumers to depend on petrol and diesel generators, increasing operating costs and reducing the productivity of businesses.
Small businesses, manufacturers and households have continued to face higher expenses because of the unreliable electricity supply. For many businesses, spending on alternative power sources has become a major part of their operating costs. The World Bank also raised concerns about the financial condition of Nigeria’s electricity sector. It estimated that tariff shortfalls could reach $2.45bn by the end of 2025, highlighting the need for changes to the way electricity tariffs and subsidies are managed.
Under the proposed reforms, the World Bank intends to support measures that can attract more private investment into the power sector. It said improved financial sustainability could encourage investors to provide funding for renewable energy projects, grid expansion and other electricity infrastructure. The institution also plans to continue supporting Nigeria’s Distributed Access through Renewable Energy Scale up platform. The initiative is expected to encourage private investment in mini grids and standalone solar systems.
These renewable energy solutions could help expand electricity access, particularly in communities that remain poorly connected to the national grid. The World Bank said strengthening the electricity network would also improve the resilience of Nigeria’s power sector. Better infrastructure, clearer regulations and more sustainable financing could help reduce the sector’s dependence on government support.
For Nigeria, the reforms are expected to address two major challenges at the same time: improving electricity access while ensuring that the power sector can operate on a financially sustainable basis. However, the success of the reforms will depend on how effectively they are implemented and how the government balances the need for cost reflective tariffs with the affordability concerns of electricity consumers.
The World Bank’s backing therefore signals continued international support for efforts to transform Nigeria’s electricity industry and create a more reliable power supply for homes and businesses.
