By Pascal Ibe

Claim

An X user, Shehu Sadiq claimed that the World Bank recently cancelled a loan for Nigeria’s power sector over corruption under President Bola Tinubu’s administration.

Verdict

This claim is FALSE.

A document from the World Bank stated that the cancellation followed a formal request by the Federal Government and a joint decision by both parties to discontinue financing under the Power Sector Recovery Performance-Based Operation due to evolving sector realities and the inability to achieve key reform milestones.

Full Text

Since January this year, power supply in Nigerian states has been very poor due to the constant tripping of the national grid.

The reasons for the unending crisis rocking the grid were the lack of proper maintenance, Gas constraint and the heavy burden it imposed.

A few months ago, President Tinubu ordered the release of over $3 billion for the maintenance and purchase of Gas, which will help to improve the power supply in Nigeria.

On 27 May, an X user, Shehu Sadiq, claimed that the World Bank recently terminated a loan for the stabilisation of the Nigerian power sector because of corruption and mismanagement under Tinubu’s administration.

The X user wrote: BREAKING: World Bank terminates $717.7 million power intervention fund for Nigeria citing corruption and mismanagement under Tinubu.

Tinubu promised Nigerians 24/7 electricity only to loot the money. The World Bank just confirmed what we have been saying about Tinubu’s regime

The post has garnered over 92k views with comments believing that the claim is not far from the truth.

Verification

However, a document from the World Bank, showed that the cancellation followed a formal request by the Federal Government and a joint decision by both parties to discontinue financing under the Power Sector Recovery Performance-Based Operation due to evolving sector realities and the inability to achieve key reform milestones.

It further stated that the development effectively terminates the remaining portion of a $1.52bn power sector recovery programme.

The cancelled amount represents the entire undisbursed balance remaining under the programme.

“The restructuring will result in the cancellation of the entire undisbursed balance of $717.7m equivalent, and no further disbursements will be made under the Program following approval of this restructuring,” the bank stated.

Check Nigerian news organisations that corroborated this report here and here.

History of this particular loan

The Nigerian government developed the Power Sector Recovery Programme as a framework to restore the sector’s financial viability and reduce its fiscal burden on public finances.

The Federal Government developed the Power Sector Recovery Programme as a framework to restore the sector’s financial viability and reduce its fiscal burden on public finances.

The programme included plans to progressively eliminate tariff shortfalls, improve operational performance among power sector institutions, and strengthen regulatory oversight and accountability mechanisms.

The loan was approved on June 23, 2020, with financing of about $752.5m equivalent. The programme was structured to improve electricity supply reliability, strengthen the sector’s financial and fiscal sustainability, and enhance accountability among key institutions in the electricity value chain.

Following initial progress recorded under the programme, the World Bank approved an Additional Financing package of approximately $763.5m equivalent on June 9, 2023, to consolidate earlier gains and support a new phase of reforms. The financing became effective on June 19, 2024, and extended the project’s closing date to June 30, 2027.

Together, the original financing and the additional facility amounted to about $1.52bn.

However, while the additional financing struggled to meet critical reform conditions, resulting in limited disbursements and eventual cancellation of the remaining funds, the parent programme achieved substantial results and largely disbursed its resources.

According to the bank, high technical, commercial, and collection losses across the distribution segment, combined with inadequate cost recovery, have created a recurring mismatch between revenues generated by the sector and its actual operating costs.

Conclusion

The claim that the World Bank cancelled the loan for the power sector in Nigeria because of corruption is FALSE.

It was a joint agreement with the Nigerian government.