— Targets 32 million new connections as sector faces $2.45bn tariff shortfall
By Emameh Gabriel
The World Bank Group has thrown its weight behind off-grid energy solutions as a primary weapon to combat Nigeria’s worsening electricity access crisis, which has left over 86 million citizens in the dark.
In its newly unveiled Country Partnership Framework for Nigeria (FY26-FY32), the global development financier confirmed that it will prioritize both on-grid and off-grid interventions to meet the targets of Nigeria’s Mission 300 Compact.
However, a significant emphasis is placed on scaling renewable energy through mini-grids and standalone solar systems—a move that signals a strategic shift toward decentralized power in Africa’s most populous nation.
Beyond expanding access, the World Bank stated that its support would be contingent on sweeping fiscal reforms within the sector.
The financial institution warned that the current tariff shortfall—estimated to hit a staggering $2.45 billion by the end of 2025, remains unsustainable.
“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 read in part.
This comes at a time when the Federal Government has implemented staggered tariff hikes, most notably the April 2024 increase for Band A customers, while maintaining subsidies for lower-consuming bands.
Despite these adjustments, the government has consistently failed to fully honour its subsidy obligations to Distribution Companies (DisCos) and Generation Companies (GenCos), creating a persistent liquidity gap that now stands at an estimated $2.45 billion, the very shortfall the World Bank is now targeting for resolution.
To bridge the funding gap, the World Bank is doubling down on catalyzing private investment. The bank noted that its intervention would include project preparation, transaction structuring, and transparent competitive processes designed to attract private investors to the generation, transmission, and distribution value chains.
The Nigeria Distributed Access through Renewable Energy Scale-up (DARES) platform will receive continued backing, aiming to leverage billions in private capital for off-grid solar installations and mini-grid developments across rural and underserved communities.
The World Bank projects that its combined on-grid and off-grid efforts under the new framework will provide electricity access to over 32 million Nigerians over the next six years.
For households currently spending exorbitant amounts on petrol and diesel generators, the shift promises cheaper, cleaner alternatives.
However, the push for tariff reforms has raised concerns among consumer advocacy groups who fear that the removal of subsidies could impose a heavier burden on already-struggling households.
The World Bank has attempted to allay these fears, insisting that its support will advance both affordability and access.
Meanwhile, Power Minister Joseph Tegbe has assured Nigerians that the liquidity crisis crippling the sector will be resolved by next year, though specific details of the government’s strategy remain sparse.
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