AfDB approves $500m loan to support second phase of Nigeria’s energy transition programme

The African Development Bank (AfDB) Group has approved a$500 million loan to the federal government to finance the second phase of itseconomic governance and energy transition support programme (EGET-SP). EGET-SP is an initiative aimed at accelerating thetransformation of the country’s electricity infrastructure and improving accessto cleaner sources of energy. On August 24, 2022, the federal government launchedNigeria’s energy transition plan as a major pathway in achieving universalenergy access by 2030 and a carbon-neutral economy by 2060. The government said the plan was designed to tackle energypoverty and the climate change crisis, as well as deliver sustainabledevelopment goal seven (SDG7) by 2030 and net zero by 2060. AfDB, on August 1, approved a loan of $500 million toNigeria to finance the first phase of the energy transition programme. In a statement on Wednesday, AfDB said the scheme’spolicy-based operation is for fiscal years 2024 and 2025. “The second phase of the programme aims to stimulateinclusive growth by accelerating structural reforms in the energy sector, whilesupporting progressive reforms of fiscal policy to boost non-oil revenues andexpand fiscal space,” the bank said. According to the lender, the programme will place emphasison three core areas. “First, the programme will deepen fiscal policy reforms bystrengthening public financial management systems and enhancing thetransparency and efficiency of public spending,” AfDB said. “Second, it will accelerate the reform of the powerengineering sector to reduce energy poverty, expand access to energy, improvesector governance, and attract private investment. “Third, it will support implementation of the energytransition plan through measures that promote climate change adaptation andmitigation, including the introduction of energy-efficiency standards forelectrical appliances.” According to the financial institution, Nigeria’s nationallydetermined contribution (NDC) will also be updated for the 2026 to 2030 period. “The programme’s direct beneficiaries are the FederalMinistry of Power, the Federal Ministry of Finance, the Federal Inland RevenueService, the Office of the Auditor General, the Debt Management Office, theNational Climate Change Council of Nigeria (NCCC), the Federal Ministry of theEnvironment, the Nigerian Electricity Regulatory Commission (NERC), and otherbodies responsible for social and economic policies,” the statement reads. “Benefits will also accrue to private businesses in the formof improved investment climate and opportunities in the energy sector at thelevel of individual states of the Federation, and from the creation of anenvironment more conducive to public-private partnerships. “As of 31 October 2025, the active portfolio of the AfricanDevelopment Bank Group in Nigeria comprised 52 projects with a total commitmentof $5.1 billion.” Commenting on the development, Abdul Kamara,director-general of the office of the AfDB in Nigeria, said the new phase willreinforce and build on the achievements of the first phase.

Read More