Kofi had never landed anywhere like this before.
From the window of the plane, as they came down, he could see it — the green, the thick green of the Delta, the rivers and the creeks and the oil platforms sitting in the water like small lit cities. Gas flares on the horizon, burning orange and patient. And below that, somewhere in the crease of it all, Benin City.
Chika, his mother, was reading. She had been reading since Lagos. A thick report with a blue cover and many footnotes.
“What are you reading?” Kofi asked.
“A project document,” his mother said. “From the Bank.”
“Is it good?”
His mother looked at the page for a moment. “It is very well written,” she said. “That is not the same thing.”
The wheels came down. The runway came up. They landed with a thud that made Kofi’s stomach do something interesting. He pressed his face to the window.
Nigeria.
The road from the airport went past workshops and filling stations and churches with names that were promises — Grace Unlimited, Miracle Centre, He Is Able. There were roadside traders with pyramids of oranges. And there were generators — outside every shop, every office, every building of any size at all. Small ones, large ones, diesel-stained and patient, waiting for the power to cut out again, as the power always cut out.
And then Kofi saw the poster.
It was on a fence beside the road. Red letters on a white border. Someone had put it there carefully. It was not a government poster. It was not an advertisement. It was a question.
power sector since 2000.
Why is there no electricity?
Kofi read it twice. He read it a third time to be sure.
“Mama,” he said. “Twenty billion dollars.”
“Yes,” his mother said.
“And it is the same as before?”
“The grid collapses the same number of times per year as it did twenty years ago. Twenty times. The same twenty.”
“Twenty billion dollars,” Kofi said again, because the number needed to be said again. “And the same twenty collapses.”
“Yes.”
“Why?”
Chika put the blue report on her lap. She looked out the window for a while. The generators went past, patient and diesel-stained.
“That,” she said, “is what I have been trying to understand.”
They passed a billboard. On it was a photograph of a large, clean, modern power plant — turbines and cooling towers and a blue sky behind them. It was very new. The billboard was very proud.
“What is that?” Kofi asked.
“That is the Azura-Edo power plant,” his mother said. “Four hundred and sixty megawatts. They finished building it in 2018.”
“Who built it?”
“Private investors. With help from the Bank.”
“Which bank?”
“The cruise ship,” his mother said. “And the casino.”
Kofi thought about this. The cruise ship was the World Bank. The casino was the IFC. He had been to both. He had spoken to the genie in the atrium.
“Was it a good project?” he asked.
“The plant works,” his mother said carefully. “The turbines turn. The electricity is generated.”
“But?”
His mother was quiet for a moment. The taxi went over a pothole. Then another.
“Kofi. You know the big dams on the Niger River? Kainji. Jebba. Shiroro. The hydropower stations the government built long ago?”
“Yes.”
“When it rains — when the rainy season comes and the rivers are full — those stations can make very cheap electricity. Almost free. The water is already there. You just let it through the turbines.”
“That sounds sensible.”
“It is sensible. But there is a problem. When this new plant was built, Nigeria signed a contract with the investors. A very particular kind of contract. It said: whether or not we use your electricity, we will pay for it. Every month. For thirty years.”
“Why would you pay for something you don’t use?”
“Because that is how you attract private investors into a risky country. You guarantee them their money. The Bank designed this kind of contract. They call it take-or-pay.”
“Take or pay,” Kofi repeated.
“Take or pay. And the payment is in dollars. Not naira. Dollars.”
There was a loud bang. The tyre of the taxi had burst. The driver got out to fix it with a crowd of onlookers enjoying this welcome distraction.
“So in the rainy season,” Kofi said, working through this slowly and carefully the way you work through a problem at school, “when the cheap hydro is running —”
“Nigeria must still pay for the expensive plant. And since it is paying, it takes the expensive electricity. And shuts down the cheap hydropower to make room.”
“They shut down the cheap electricity to buy the expensive electricity they have already paid for.”
“Yes.”
“Because of the contract.”
“Because of the contract that the Bank helped to design.”
“Mama,” Kofi said. “Was the Azura project competitively bid? Did other companies offer to build it cheaper?”
His mother looked at him. “No,” she said. “It was not competitively bid.”
“The Bank always says markets are the best way to find the right price.”
“Yes. They do say that.”
“But they did not use a market to find the price for this project.”
“No.”
“So we don’t know if it was the right price.”
“No. We don’t.”
The taxi got going again. Kofi sat back and stared at the ceiling for a while.
“And the Bank guaranteed the payment,” he said. “If Nigeria didn’t pay, the Bank’s guarantee would be called.”
“Yes. The World Bank partial risk guarantee. The MIGA political risk guarantee. IFC had equity in the project as well.”
“So the Bank advised Nigeria on how to design the sector. And then IFC invested in the private company on the other side of the contract. And then MIGA guaranteed the private company against Nigeria not paying. While advising Nigeria.”
“That is correct.”
“Mama,” Kofi said. “That is a lot of hats for one organisation to wear.”
His mother smiled. “The genie,” she said, “has a name for this. He calls it a structural conflict of interest.”
“We should ask him about it when we are back in Washington.”
“We will. We will ask him to explain why a country with cheap hydro electricity was asked to sign a thirty-year dollar-denominated take-or-pay contract for a plant that was not competitively bid, in a sector where the distribution companies were already bankrupt.”
“Do you think he will have a good answer?”
Chika looked out the window. A generator started up outside a pharmacy as the power cut out.
“I think,” she said, “he will have a very long answer. Whether it is a good one is a different question.”
The plant: Azura-Edo IPP, 461 MW open-cycle gas turbine, Edo State. Financial close 2015, commercial operations 2018. First World Bank Group-supported greenfield private power transaction in sub-Saharan Africa.
The WBG involvement: IFC — $100M equity and senior debt in the developer. MIGA — $650M political risk guarantee against government non-payment. IBRD — $237M partial risk guarantee. All three arms of the WBG, in the same transaction, advising the same government.
The contract: Take-or-pay, 30 years. Capacity charges denominated in US dollars. Nigeria pays whether or not the electricity is dispatched.
What came next: When the naira collapsed after the 2016 oil shock, the dollar obligations became crushing. This project — and the other IPP supported by the Bank, Calabar — impose a large and ongoing financial burden on Nigeria.
They drove through the city. It was busy — a city of two million people, concrete and colour and sound and motion. Boys on motorcycles weaving through the traffic. Women selling peppers and plantains. A man pushing a cart of spare parts. A group of young men sitting on a wall in the shade, in the middle of the afternoon, with nowhere particular to go.
“Mama,” Kofi said. “How old are those boys on the wall?”
“Eighteen. Maybe twenty.”
“Why are they sitting there?”
“Because there is not enough work.”
“But there are so many of them. And they look — they look like they could do things.”
“They can do things,” his mother said. “They are very capable. Edo State produces brilliant people. Engineers. Doctors. Entrepreneurs. The schools here are good. The families care about education.”
“So why are they sitting on a wall?”
His mother was quiet for a moment.
“Kofi. Do you know where most of the people crossing the Sahara to get to Europe come from? The ones who put themselves on rubber boats in Libya?”
“No.”
“Edo State is the number one source of trafficked people in all of Nigeria. These young men — and young women — are the ones making that journey. Across the desert. Into the Mediterranean. Into a world that mostly does not want them.”
“Why?”
“Because there is nothing here. Because twenty billion dollars moved through this sector and the lights still go out. Because the private sector was supposed to create jobs and instead it created contracts. Because the PSW was supposed to open a window and the window has not opened.”
“The PSW,” Kofi said. “The genie told me about it.”
“The genie told you it was designed to take concessional money from IDA and use it to de-risk private investment in the hardest places.”
“He said the hardest places are exactly where IFC does not go.”
“Yes. And Edo State is one of the hardest places. And we drove past thirty generators in the last ten minutes.”
They stopped for water at a small shop. A generator ran outside. The owner, a woman in a yellow wrapper, gave Kofi a cold bottle without being asked and smiled at him in the way that grown-ups in this country smiled at children — as if the child was something precious, and perhaps something to be protected from things she knew about.
Kofi sat on the step and drank his water and looked at the street.
“Mama,” he said. “Where is the money? The PSW money. The blended finance money. The IDA money. If it is not here — where is it?”
His mother sat down beside him. She thought about this for a long time. A motorcycle went past with three people on it. A child ran across the road chasing a bottle cap.
“It is in the cloud,” she said.
“The cloud?”
“Somewhere between Washington and here, there is a cloud. The money goes into the cloud and results come out the other side. But the cloud is very thick. We cannot see through it. We cannot see what the money is doing while it is in there. We cannot check if the results are real. We cannot feel it. We cannot touch it. And here, on this step, in this street, with those boys on the wall — we cannot find it.”
“The genie knows where it is,” Kofi said.
“The genie knows where it was committed. He knows the commitment numbers very well. It is the results he is less certain about.”
“There is PSW,” Kofi said. “But the window has not opened.”
“The window was designed to open. But someone locked it from the inside. And the people with the key are the same people who decide how much money goes through the window. There is no competition. Nobody bids for the key. Nobody offers to do it cheaper or better.”
“If there was a competition,” Kofi said, “someone might offer to do it in a way that actually opened the window.”
“Yes,” his mother said. “Someone might.”
On the way back to the hotel, they passed through a part of the city where you could smell it — faintly, under the exhaust and the cooking smoke. Oil. Gas. The Delta. The thing that had made Nigeria a place the whole world paid attention to for fifty years.
“Mama,” Kofi said. “This country has oil. It has gas. There is gas flaring over there on the horizon — they are burning the gas because they cannot use it.”
“Yes.”
“And there is no electricity.”
“Correct.”
“And the distribution companies that buy the power from the generators — they went bankrupt.”
“Most of them, yes. They were bought in 2013 in a privatisation the Bank supported. Many of the buyers were — shall we say — well connected. The Bank was there, inside the room for a decade before the privatisation happened. They knew the sector was fragile. They approved these two projects anyway. This happened in a country where there was surplus generation and a lot of stranded generation assets. The transmission network and the distribution network was what needed improvement.”
“And now Nigeria pays millions of dollars a year in take-or-pay contracts, in dollars, for electricity that doesn’t always get distributed, from a sector that has twenty grid collapses a year.”
“That is an accurate summary.”
“Mama,” Kofi said. “The kidnapping capital of Nigeria — is it in the Niger Delta?”
His mother looked at him carefully. “For many years, yes. The Delta. This is the place where kidnapping became a business and then spread across the country.”
“When there are no jobs,” Kofi said, “and there is no electricity, and there is gas burning on the horizon that no one can use — the reason why people pick up guns instead of tools is quite clear. Isn’t it.”
His mother did not answer this. The taxi went over another pothole. The gas flares burned on the horizon, orange and patient, wasting their energy into the sky as they had for decades.
“We will ask the genie,” Kofi said quietly.
“We will ask the genie,” his mother agreed.
“And we will ask him what the PSW funded instead of this. We will ask him who decided that banks in Central Asia needed sixty-seven percent concessional subsidies when Edo State exists like this.”
“And we will ask him,” his mother said, “why nobody competed for the right to do better.”
Kofi nodded. He pressed his face to the window and watched the city go past in the golden light of the late afternoon. The generators. The boys on the wall. The gas flares. The cold water the woman had given him without being asked.
He had a lot of questions for the genie.
The Nigeria PPP Power Sector note — “How Not to Do PPPs: World Bank, IFC, and the Sovereign Risk Transfer Problem in Nigeria’s Power Sector” — has been submitted to the World Bank Group for factual review and comment. It will be published in full on mdbreform.com. Any response received from the World Bank Group will be published alongside it.
Data sources: NBET (Nigerian Bulk Electricity Trading Company) payment reports · World Bank ICR and project documents · IFC disclosure portal · MIGA project database.
The PSW Reform Paper published today on mdbreform.com shows that 83% of PSW resources flow through IFC-linked facilities without competitive allocation. The five sectors with the strongest direct links to job creation — energy, agribusiness, health, tourism, manufacturing — receive only 15.4% of PSW resources. Financial intermediaries in Europe and Central Asia receive average subsidies of 67%. Africa, home to the world’s most acute jobs crisis, receives 37%.
Recommendation 5 of “The Full Picture” published on the platform calls for competitive allocation of PSW resources: reverse auctions, open-access platforms, performance-based disbursement. Benin City is what Recommendation 5 is for. The window needs to open. The key needs to be contested.
Niger Delta Context
The GIS baseline mapping report for the Niger Delta region — nine states, 30 million people, oil wealth and poverty, environmental degradation, and the history of federal interventions from 1965 to the 2009 Amnesty Programme — is available below.
Niger Delta GIS Baseline Report (PDF)Chika had come home to Benin City. She wanted Kofi to experience the cultural richness of the Benin Kingdom and the Igbo people. She also wanted to show him that projects funded by the Bank can work — and work well. She has a friend. His name is Toju Onaiwu. He was the Project Coordinator for Edo State for the State Employment and Expenditure for Results (SEEFOR) project in the Niger Delta. He has a story to tell about what happens when the money from Washington meets the ground in Nigeria. It can improve systems and it can create jobs — if the design is owned by the state government and if the implementation team is well run.