By Annette Ikponmwonba | September 3, 2026
Keypoints
- World Bank to support reforms to Nigeria’s electricity tariff and subsidy frameworks.
- The reforms are aimed at restoring financial sustainability in the power sector.
- Nigeria has more than 86 million people without access to electricity, according to the World Bank.
- Electricity sector tariff shortfalls were estimated at $2.45 billion by the end of 2025.
- The World Bank plans to support both on-grid and off-grid electricity solutions.
- Its six-year framework targets electricity access for more than 32 million Nigerians.
- The bank will help attract private capital into generation, transmission, distribution, mini-grids and solar systems.
- The reforms come amid ongoing efforts to address liquidity challenges in Nigeria’s electricity market.
Main Story
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 commitment was contained in the World Bank’s Country Partnership Framework for Nigeria covering the 2026 to 2032 fiscal years.
According to the framework, the bank’s intervention will focus on improving electricity access and reliability for households and businesses through both on-grid and off-grid solutions, The World Bank said its support would include reforms targeting electricity tariffs and subsidies, competitive investment planning and stronger regulation of the power sector, The institution noted that Nigeria has the world’s largest electricity access deficit, with more than 86 million people currently without access to electricity.
The Issues
The financial sustainability of Nigeria’s electricity sector remains a major challenge, The World Bank estimated that tariff shortfalls reached $2.45 billion by the end of 2025, contributing to the liquidity problems affecting the sector, For years, electricity tariffs were kept below the actual cost of supplying power, with the Federal Government expected to cover the resulting shortfalls.
However, the failure to fully settle those obligations has contributed to financial pressure across the electricity value chain, Frequent power outages have also forced households and businesses to depend heavily on generators, increasing operating costs and reducing productivity.
What’s Being Said
The World Bank said tariff and subsidy reforms would be combined with measures designed to attract private investment into Nigeria’s electricity market, The bank plans to support project preparation, transaction structuring and competitive processes aimed at attracting private capital into generation, transmission and distribution, It will also continue supporting the Nigeria Distributed Access through Renewable Energy Scale-up platform, which is designed to expand investment in mini-grids and standalone solar systems, The World Bank said its combined on-grid and off-grid interventions under the framework could provide electricity access to more than 32 million Nigerians.
What’s Next
The World Bank is expected to work with the Federal Government, regulators and private-sector investors on implementing the reforms over the six-year partnership period, Attention will likely remain on how tariff adjustments and subsidy reforms are structured to balance financial sustainability with electricity affordability for consumers, The bank will also support the development of public-private partnerships and investment frameworks across the electricity value chain.
Bottom Line
The World Bank is backing a major restructuring of Nigeria’s electricity financing model, with tariff and subsidy reforms at the centre of efforts to resolve the sector’s liquidity crisis. The success of the plan will depend on whether Nigeria can attract sufficient private investment while improving electricity access, reliability and affordability for consumers.
