The African Development Bank Group has approved a fresh $500 million loan to the Federal Government of Nigeria to support major economic governance reforms and accelerate the country’s energy transition agenda.
The approval, announced in a statement issued Wednesday by Alexis Adélé of the Bank’s Communication and External Relations Department, followed a meeting of the AfDB Board of Directors in Abidjan. The facility will finance the second phase of the Economic Governance and Energy Transition Support Programme, covering fiscal years 2024 and 2025.
According to the AfDB, the policy-based loan is designed to strengthen Nigeria’s fiscal framework, advance critical energy sector reforms, and promote climate resilience.
Three Key Focus Areas
The Bank said the second phase of the programme targets three strategic areas:
1. Deepening Fiscal Policy Reforms:
The initiative will strengthen public financial management systems, bolster transparency in government spending, and improve efficiency across ministries and agencies.
2. Accelerating Energy Sector Reform:
The programme seeks to address longstanding challenges in the power sector by reducing energy poverty, improving electricity access, enhancing sector governance, and increasing private sector investment.
3. Advancing Energy Transition and Climate Action:
The AfDB will support Nigeria’s Energy Transition Plan, promote climate change adaptation and mitigation, and introduce efficiency standards for electrical appliances nationwide. The programme will also help update Nigeria’s Nationally Determined Contribution (NDC) for 2026–2030 in line with global climate targets.
Building on Reforms
The Director-General of the AfDB’s Nigeria Country Department, Abdul Kamara, said the second phase is designed to stimulate inclusive economic growth by combining structural power-sector reforms with progressive fiscal measures that expand the country’s fiscal space.
He noted that the intervention will consolidate gains from the first phase while supporting reforms aimed at increasing non-oil revenue and improving the investment environment.
Beneficiaries and Impact
Key government institutions—including the Ministries of Power, Finance, and Environment; the Federal Inland Revenue Service; the Nigerian Electricity Regulatory Commission; the Debt Management Office; the Office of the Auditor-General; and the National Climate Change Council—are expected to directly benefit from the programme.
The private sector will also gain from an improved regulatory environment and expanded opportunities in renewable energy and power infrastructure through public-private partnerships.
AfDB’s Growing Portfolio in Nigeria
As of October 31, 2025, the AfDB had 52 active projects in Nigeria valued at $5.1 billion. The new $500 million loan underscores the Bank’s continued commitment to supporting Nigeria’s economic stabilization efforts, sustainable energy transition, and inclusive growth agenda.
