World Bank-funded interventions in Nigeria’s power sector are facing fresh scrutiny over effectiveness, value for money, and long-term impact.
While the projects were designed to expand access and strengthen infrastructure, industry watchers say progress has been slow and results remain below expectations, despite Nigerians’ demand for improved power supply.
With growing calls for a review of project execution, stakeholders are now demanding accountability to ensure public funds deliver the intended goals.
$20 Billion Down The Drain? Concerns Over Execution And Value
Kunle Olubiyo, President of the Nigeria Consumer Protection Network, alleged that not less than $20 billion has been borrowed as World Bank loans pre- and post-privatisation and channelled to the Nigerian electricity ecosystem, “yet there is no value for money.”
According to Olubiyo, the Nigerian Electricity Sector Performance Improvement Plan in the last 15 years, funded by the World Bank, African Development Bank, CBN, and other Development Finance Institutions, leaves much to be desired.
“The question is: how far has the Nigerian Government gone in achieving these highlighted projects?
What mechanisms are in place for project monitoring, evaluation, KPIs, and tracking of these critical transmission infrastructure projects?
How have these projects contributed to increasing transmission wheeling capacity, load dispatched, and load management from midstream to downstream?
What is the mechanism in place for funding the projects?” he asked.
A source added that the implementation framework of many World Bank-funded projects has not translated into sustainable industrial and economic benefits. While substantial funds were committed to expanding electricity infrastructure, procurement structures have limited the participation of established indigenous manufacturers.
“A significant proportion of the funds ultimately leaves the Nigerian economy through foreign procurement rather than being retained within the local industrial ecosystem,” he said, noting that opportunities to stimulate domestic manufacturing, create jobs, and deepen technology transfer have not been fully realized.
Local Manufacturers Shut Out Of Billion-Dollar Contracts
Premium News gathered that participation of indigenous firms has remained far below expectations, despite Nigeria having competent manufacturers of meters, transformers, switchgear, cables, and other electrical equipment.
Although local content policies exist, observers said procurement requirements under donor-funded projects tend to favour foreign manufacturers with greater financial capacity and international references, creating barriers for qualified Nigerian companies.
“This approach inadvertently weakens local industry by denying indigenous manufacturers opportunities to expand production, invest in R&D, improve technology, and compete internationally,” a source said.
An observer noted that prioritising qualified local manufacturers would deliver increased employment, higher local value addition, technology transfer, improved tax revenues, and better after-sales support.
“Supporting indigenous manufacturers is therefore not merely a local content issue; it is an economic development strategy that strengthens national resilience and self-reliance,” he said.
Relegated To Subcontracts: The Second Fiddle Challenge
Observers said while the projects have contributed to some knowledge transfer, they have not been fair to indigenous manufacturing.
Many local manufacturers continue to face challenges qualifying for donor-funded procurement due to stringent financial thresholds, international experience requirements, and conditions that favour multinational suppliers.
“Consequently, Nigerian companies are frequently restricted to subcontracting roles while the larger manufacturing contracts are awarded to foreign firms,” a source added.
Transparent Process, But Is It Equitable?
World Bank-funded projects operate under internationally recognized procurement guidelines designed to promote transparency and competition.
These are stronger than many conventional public procurement processes.
But an industry player said transparency alone does not guarantee equitable participation.
“Where procurement requirements unintentionally exclude capable indigenous manufacturers, the process may remain procedurally transparent while failing to achieve broader national development objectives,” he said.
Kunle Olubiyo told _Premium News_ that World Bank procurement procedures in Nigeria have been skewed in favour of Indians, Chinese, Asians and their proxies.
“Whenever there are credit and loan facilities to finance projects in Nigeria, and indigenous firms decide to compete, Asian firms are usually favoured and the processes are manipulated in their favour. This is against the spirit and letter of the Local Content Act,” he alleged.
“Sadly, for the past 30 years or more, most of the directors and top-level staff of the World Bank/IMF Nigeria Country Office have been individuals of Asian origin. It is believed that these postings are intentional and deliberately calculated to skew procurement procedures in favour of firms of Asian origin and their proxies.”
Value For Money Under Scrutiny
Stakeholders expressed mixed reactions over the impact of World Bank power projects.
Some believe the projects have delivered improvements in infrastructure, network modernization, metering, and institutional reforms.
However, a source said because these are loans to be repaid by Nigeria, value for money must be assessed from a broader economic perspective.
“Where imported equipment dominates procurement despite the availability of qualified local manufacturers, Nigeria loses opportunities for industrial development, employment creation, and foreign exchange conservation,” he said.
He also raised concerns over the long-term performance of some imported meters and equipment that failed before their warranty period. Because many foreign manufacturers have limited presence in Nigeria, warranty and technical support is often difficult.
“Equally important is that meters and transformers are the responsibility of Discos. Yet many consumers still bear costs through meter acquisition schemes while experiencing inadequate supply,” he added.
Observers also alleged that the Presidential Power Initiative, Power Sector Recovery Programme, and other World Bank projects were designed without proper needs assessment or input from Discos, TCN, and Gencos.
“These projects were put together by foreigners and World Bank consultants without local inputs and consultations with Nigerians and market participants,” Olubiyo said.
List Of Projects Alleged To Have Failed*
Olubiyo alleged that several World Bank-funded intervention projects are substandard and have now failed. They include:
1. *Kaduna Meters* – World Bank funded, Pole Mounted Meters
2. *Karu Pole-Mounted Distribution Transformers* – World Bank funded
3. *Abuja Meters* – World Bank funded, Pole Mounted Meters
And several other PMU/World Bank projects carried out over 10 years ago.
“Pole-mounted distribution transformers in Karu, FCT Abuja and Kaduna funded through World Bank credit facilities, are today moribund projects. Yet the Nigerian Government is indebted to several billions of dollars for these projects,” he said.
The LEEC Transformer Saga
Transformers manufactured by China’s Liaoning Efacec Electrical Equipment Co. Ltd [LEEC] have a documented history in Nigeria’s power sector through the Transmission Company of Nigeria, TCN.
Between 2011 and 2012, TCN procured sixteen 60MVA LEEC power transformers as part of national grid improvement initiatives.
About 20 units of LEEC transmission transformers were allegedly acquired in total through Power Sector Multilateral Intervention Projects coordinated by the TCN Projects Monitoring Unit with World Bank credit facilities.
According to Olubiyo, the most cited case occurred in 2018 when a 60MVA LEEC transformer at the Uyo Transmission Substation caught fire shortly after installation. The incident forced TCN to replace the unit.
Similar fire incidents were recorded in Abuja, Kano, Lagos, Birnin Kebbi and other locations across Nigeria.
He alleged that most of the 60MVA LEEC transformers procured for the Transmission Expansion/Improvement Programme, valued at several billion dollars, were destroyed by fire.
The fires, he alleged, did not only destroy the transformers but also gantries, switchyards, line materials and power system protection devices, leading to additional billions spent on replacements.
“About 20 LEEC transmission transformers procured by TCN at over $5 billion through World Bank/TCN PMU multilateral finance credit facilities have all been burnt due to substandard materials,” a source alleged.
The TCN later announced the completion of two new 60MVA, 132/33kV power transformers in Uyo and Kano.
In a statement signed by General Manager, Public Affairs, Mrs. Ndidi Mbah, TCN confirmed that the new 60MVA transformer in Uyo was installed to replace the LEEC unit that caught fire.
Energized on March 22, 2018, the new transformer increased the number of 60MVA units in Uyo to three and raised the substation’s capacity from 120MVA to 180MVA. TCN said this will improve supply to Port Harcourt DisCo customers in Uyo, Oron, Mbo, Ikot Ekpene, Abak, Eket, Airport and environs.
In Kano, the capacity of Dan Agundi Substation increased from 60MVA to 120MVA following the installation of another new 60MVA transformer. The project, earlier awarded to a contractor, was completed by TCN engineers within two weeks.
Stakeholders Flag Misaligned Spending
Uket Ubonga, Executive Secretary, Power And Consumers Advocates Network, PECAN, recalled a November 2023 meeting with the World Bank Country Office in Abuja over the FG’s $3.5 billion request for additional power sector funding.
“Looking at the subheads/line items for which huge sums were said to have been expended previously, it was obvious that most of the items had little or no impact on the power sector,” he said.
“We suggested the Bank put in place a monitoring team to track projects executed with credit facilities. Our position was that FGN allocation does not align with the immediate needs of the power sector.”
He said they pushed for priority funding for metering and distribution to tackle the 47% ATC&C losses, and for comprehensive customer enumeration as emphasized in the 2018 revised PSRP.
“The only thing that has come out of the various interactions with the World Bank is the ongoing DISREP metering programme,” he said.
However, DISREP now faces delays due to a court injunction secured by the Association of Meter Manufacturers of Nigeria, AMMON. The World Bank’s Implementation Status Report lists the case as the project’s biggest risk to procuring 1.55 million smart meters.
Industry sources also revealed that a $730m loan originally under PSRP has been repurposed toward distribution sector recovery after Nigeria failed to meet conditions for an additional $750m tranche.
$10m Grid Telemetry Project: Can It Fix Data Gaps?
The World Bank is to fund the replacement of 2,000 obsolete National Electricity Grid Point of Interface feeders and 2,000 feeder meters with smart “Electricity Grid Telemetry Meters” at about $10 million. It is part of the $2 billion Nigerian Electricity Grid Automation and Digitalisation Programme.
Calls have grown for an overhaul of wrongly installed transmission grid meters used for measuring electricity between Generation, Transmission, and Distribution. Many say the current meters are obsolete and defective, undermining data accuracy and causing billing inefficiencies.
The project aims to close gaps in data collection, grid digitalisation, and telemetry.
Some Gains Recorded Despite Challenges
Experts said not all World Bank projects are bad.
A top industry source said World Bank financing over the past 16 years has supported reforms and infrastructure across generation, transmission, and distribution.
These include Distribution Network Expansion, PIPs by Discos, Mass Metering Programmes, Transformer Deployment, Transmission Reinforcement, and SCADA/Feeder Telemetry Systems.
“Collectively, these projects are intended to reduce ATC&C losses, improve reliability, expand access, and increase revenue collection,” he said.
“While many have produced measurable improvements, their broader developmental impact would have been greater if procurement had been structured to maximize indigenous manufacturing participation.”
The Way Forward: From Loans To Industrialization
Stakeholders said the true measure of value should go beyond projects executed to include how financing strengthens industrial capacity and creates jobs.
“Development finance should become not only an instrument for infrastructure expansion but also a catalyst for local industrialization and national economic transformation,” an industry source said.
He called for procurement policies that give reasonable preference to certified Nigerian manufacturers without compromising quality or accountability.
Olubiyo said the World Bank Nigeria Country Office needs to align with local content, prevent dumping of finished products, and raise KPI benchmarks.
“The bank also needs to ensure probity, accountability, and transparency, and end poor management and near-zero standards that have continued to shortchange the citizenry and the Nigerian Government in these badly packaged World Bank credit facilities.”
Nigerians are now waiting for answers to probing questions about World Bank loans, the value derived by the power sector, and the country’s path to industrialization.