Documents obtained from the World Bank show the cancellation followed a formal request from the Federal Government.

Both parties agreed to discontinue the remaining financing under the Power Sector Recovery Performance-Based Operation after key reform targets failed to materialise.

The decision also brings the programme to an earlier close. Its end date was moved from June 30, 2027, to May 31, 2026.

According to the restructuring document, “The restructuring will result in the cancellation of the entire undisbursed balance in the amount of $717.7 million equivalent, and no further disbursements will be made under the Program following approval of this restructuring.”

The programme was introduced in 2020 as part of efforts to restore financial stability in Nigeria’s electricity sector, improve power supply and reduce the industry’s dependence on government support.

At the start, the World Bank approved about $752.5 million for the initiative. Three years later, after early reforms showed some progress, the bank approved an additional financing package of roughly $763.5 million to extend the programme and deepen reforms across the sector.

Together, both facilities were worth around $1.52 billion.

Still, the additional financing package struggled almost from the beginning.

The World Bank said the fall of the naira after the foreign exchange market liberalisation in June 2023 significantly raised electricity generation costs because gas prices are tied to the US dollar.

More than 70% of electricity supplied into Nigeria’s national grid comes from gas-fired plants.

At the same time, electricity tariffs were largely unchanged for most consumers. Only Band A customers saw tariff adjustments in April 2024.

That gap between high production costs and revenues collected from consumers widened rapidly.

According to the World Bank, tariff shortfalls climbed from N140 billion in 2022 to about N1.9 trillion annually in both 2024 and 2025.

The bank said the growing deficits placed heavy pressure on government finances and weakened the reform programme.

“Due to the mismatch between the electricity generation costs and the sector tariff revenues, the tariff shortfalls increased sharply in the last 3 years, moving from a low of N140bn in 2022 to a high of N1.9tn per year in 2024 and 2025, putting serious pressure on the limited Federal Government of Nigeria’s fiscal space,” the report stated.

The World Bank also pointed to deeper structural problems in the electricity sector, including weak performance by distribution companies, transmission bottlenecks, underused generation capacity, poor cost recovery, and high technical and commercial losses.

Those problems slowed implementation and made it difficult for Nigeria to meet conditions tied to further disbursements.

The bank said authorities failed to establish a credible financing framework capable of reducing tariff deficits over time.

“Recent financing plans have not fully identified sufficient sources of funding to cover tariff shortfalls, nor established a credible trajectory for their reduction,” the report stated.

Even so, the original phase of the programme achieved some measurable results before conditions worsened.

The World Bank said tariff shortfalls dropped by 71% between 2019 and 2022, falling from N581 billion to N166 billion.

Regulatory cost recovery improved from 56% to 94% during the same period, while electricity supplied to distribution companies increased by 13% between 2018 and 2021.

These encouraged the bank to approve additional financing in 2023.

However, implementation later stalled. The World Bank said none of the global indicators tied to the additional financing arrangement were achieved.

It also downgraded implementation progress under the programme to “Moderately Unsatisfactory.”

Financial records in the restructuring document show that only about 9% of the additional financing package was eventually disbursed.

Out of the programme’s total commitment of roughly $1.52 billion, around $796 million had been released before the cancellation, leaving $717.7 million undrawn.

The World Bank concluded that the programme’s structure no longer matched realities in Nigeria’s power sector.

“Taken together, these developments point to a misalignment between the design of the operation and the evolving implementation context,” the report stated.

The cancellation comes days after the Accountant-General of the Federation, Dr Shamseldeen Ogunjimi, warned that Nigeria could reconsider future World Bank loan arrangements if approval and disbursement delays continue.

Speaking during a meeting with a World Bank delegation in Abuja, Ogunjimi said Nigeria should not face long delays in accessing funds tied to development projects because the facilities are loans, not grants.

He said, “If approvals take more than six months, the Nigerian Government may no longer honour such arrangements.”

Ogunjimi also urged the World Bank to speed up approvals and disbursements to support Nigeria’s development priorities.

Do we have more sustainable options?  Kenya, with little fanfare, is rewriting the script in answering these existential questions.

Over the past few years, Kenya has enacted a sweep of legislation culminating into  the most ambitious domestic capital mobilization framework on the African continent. Its centrepiece, a KSh 5 trillion National Infrastructure Fund, which is not another borrowing vehicle.

It is something structurally different: a mechanism designed to make Kenya’s own savings, its pension funds, its retail investors, its private equity market, do the work that foreign debt was never built to do sustainably.

The problem it is solving is rarely discussed in development economics circles, though it should be. Africa’s infrastructure financing gap, estimated at $68 to $108 billion a year by the African Development Bank, is not primarily a shortage of money.

There is no shortage of capital in the world. The shortage is of investable projects: opportunities where private capital can be mobilised  without facing crippling sovereign risk, opaque regulatory environments, or legal frameworks that shift mid-contract. That uncertainty is not a footnote.

It is the reason trillions of dollars in global private capital have largely bypassed the continent.

“The shortage is not of money. It is of investable projects, and the legal certainty that makes them possible.”

The National Infrastructure Fund established as an Act of Parliament addresses this directly. By absorbing sovereign and legal risk at the project level, it removes the uncertainty that forces private investors to demand prohibitive risk premiums or walk away entirely.

It acts as a structural buffer between the Kenyan state and the market, giving development finance institutions, private equity funds, domestic pension managers, and local retail investors a common platform on which to participate without exposure to the regulatory volatility that has stalled projects across the continent for a generation.

The financing pathway is streamlined: due diligence burdens shrink, incentives align between public and private participants, and patient long-term capital, the kind infrastructure actually requires, finds a credible home.

The KSh 5 trillion pipeline of dams, roads, and urban transit becomes financeable not because Kenya has borrowed more, but because the NIF makes the risk profile legible and acceptable to capital that previously had nowhere in Kenya to go.

This matters beyond Kenya’s borders. Rwanda built a competitive economy from near-zero after 1994. Botswana converted diamond revenues into one of Africa’s most stable development trajectories through the Pula Fund.

Mauritius became a continental financial hub through regulatory design alone. These nations did not succeed by waiting for the global financial architecture to serve them.

They engineered their own conditions for growth. Kenya is now doing the same, at greater scale, and with instruments far more sophisticated than anything its predecessors had available.

The human dimension of this architecture is equally significant. The recently executed 65 percent IPO of the Kenya Pipeline Company, targeting KSh 100 billion on the Nairobi Securities Exchange, was the largest state offering since Safaricom’s landmark 2008 listing.

When an ordinary Kenyan in Kisumu or Eldoret can hold shares in the pipeline that carries fuel to their town, development stops being something administered from above and becomes something people own, a democratisation of sovereign wealth.

A proposed Sovereign Wealth Fund, with an intergenerational component anchored in the Kenyan laws, extends the same logic forward in time: today’s resource revenues become tomorrow’s infrastructure, rather than today’s debt service.

None of this works without legal ingenuity. The legal profession across Africa must stop treating transformative legislation as a courtroom opportunity and start treating it as architecture to be designed soundly from the outset; an opportunity to co-create with an intention of catalysing and not curtailing growth. Innovation in finance and innovation in law must move together, or neither moves fast enough.

In this journey, perfection ought to be modelled in a kaizenian fashion; incremental. Waiting for perfection may altogether kill the opportunities and ultimate achievements.

As Mohammed bin Rashid Al Maktoum, the architect of Dubai’s own transformation from desert outpost to global financial hub, once observed:

“Time is too precious to waste on postponing our people’s dreams and expectations.”

Africa’s legal community would script history to take that as its mandate.

The World Bank estimates that a 10 percent increase in infrastructure investment can raise long-term GDP growth by one to two percentage points in emerging economies. Those numbers translate into jobs, hospitals, schools, and the material improvement of lives.

Kenya’s new framework will not automatically deliver them. Discipline, transparency, and governance that is genuinely insulated from political interference will determine whether the architecture performs or corrodes.

Africa does not need to borrow its way to prosperity. It needs to build its way there, using the assets it already owns, the savings it already holds, and the institutions it must now have the courage to build.

The opportunity is not merely economic. It is civilisational.

*Eric Gumbo (MBS) is a partner at G&A Advocates LLP, a firm with two decades of experience advising on sovereign funds, capital markets, and regulatory law across East Africa.

The proposed funding will support the CBN Technical Assistance Facility, a project designed to address longstanding and emerging challenges in Nigeria’s financial sector while improving domestic payment systems, particularly for remittances.

The initiative is built around three key objectives:

1. Enhancing the CBN’s Technological Capacity – This involves adopting advanced technology, leveraging expert advisory services, facilitating peer-to-peer exchanges with other central banks, and modernizing internal processes to align with the demands of the digital age.
2. Strengthening the CBN’s Supervisory Role – By integrating data and technology-driven improvements, the project aims to bolster the CBN’s regulatory and oversight capabilities.
3. Modernizing Domestic Payment Systems – The facility will focus on enhancing the efficiency, security, and reliability of Nigeria’s payment infrastructure.

The project, with an estimated cost of $10.5 million, is scheduled for approval on June 12, 2025.

This request follows the World Bank’s recent approval of $1.08 billion for Nigeria to improve education quality, enhance nutrition for underserved populations, and strengthen economic resilience.

Under the current administration, Nigeria has secured approximately $8.03 billion in loans across 13 World Bank-funded projects within the past two years.

They include projects in the power sector, renewable energy, states’ resource mobilisation programme, adolescent girls’ initiative for learning and empowerment and a women’s empowerment project.

Wale Edun, the Minister of Finance and Coordinating Minister of the Economy, told State House Correspondents that the FG would proceed to receive the $3.5bn “zero-interest” loan payable within 40 years with a 10-year moratorium, meaning payments would begin from 2033.

Edun explained,

“Today at the Federal Executive Council, I presented five memos which were gracefully approved by the Council. They had to do with concessional and, in many cases, zero-interest financing by the World Bank and the International Development Association, which is the very concessional financing arm.

“The projects that were approved for funding were in the power sector and then the renewable energy sector. There was funding for states for resource mobilisation programmes to help them with the internally-generated revenue efforts.

“There was a project for adolescent girls’ initiative for learning and empowerment. And then finally the fifth financing that was approved was for Women project.”

The Finance Minister explained that the girls’ programme worth $700m would support young girls within secondary school age to equip them with marketable skills in addition to their academic achievements.

Putting a figure to the project, Edun said, “$700m is the size of the current project.

“So those were five loans totalling $3.45bn. And as you know, the tenure is all around 40 years, with a moratorium period of around 10 years and interest very low, or in the cases of either loans, zero interest. However, some fees would be incurred.”

Explaining further, Dr Tahir Mamman, the Minister of Education, said the girls’ programme, which initially began in seven states, was expanded across 11.

Mamman said, “Initially, from seven participating states, we will now have about 11 additional states participating in this project, which will lead to the empowerment of girls between 10 to 20 right across the participating states.

“This is a very major escalation of this programme that is meant to empower our girls, our teachers and the provision for additional schools in the country.”

He added that the programmes were in line with the Tinubu administration’s agenda to reduce, “if not eliminated altogether,” the number of out-of-school girls and children generally.

The Federal Executive Council (FEC) also approved the setting up of the Humanitarian and Poverty Alleviation Fund with the hope of raising the sum of $5bn annually for emergency responses to humanitarian crises.

The minister of humanitarian affairs and poverty alleviation, Dr. Betta Edu, disclosed this. Edu said  the money would be raised from the government, contributions from development partners, private sectors, and individuals, among others.