African Development Bank Approves $500m Loan for Nigeria

In a significant move to accelerate Nigeria’s energy transition and improve access to cleaner sources of energy, the African Development Bank Group (AfDB) has approved a loan of $500 million to the Federal Government.

This loan will finance the first phase of the Economic Governance and Energy Transition Support Program (EGET-SP), aimed at transforming the country’s electricity infrastructure.

The EGET-SP is designed to support the implementation of Nigeria’s new Electricity Act and the Nigeria Energy Transition Plan, launched in August 2022.

The plan envisions the development of 250 GW of installed electricity capacity by 2050, with 90% of it being renewable.

Additionally, it aims to provide clean cooking access to the bulk of the population by 2030, using liquefied petroleum gas (LPG), biogas, biofuels like ethanol, and electric cookstoves.

The $500 million loan will help bridge the financing gap of the Federal Budget in the 2024/25 fiscal year, specifically supporting the implementation of the country’s new Electricity Act and the Nigeria Energy Transition Plan.

This loan is part of the AfDB’s efforts to support Nigeria’s economic growth, poverty reduction, and climate action initiatives.

The EGET-SP aligns with the AfDB’s new 10-year strategy (2024-2033), its High 5 priorities, and the New Deal on Energy for Africa, which aims to achieve universal access to modern energy by 2030.

As of July 2024, the AfDB’s active portfolio in Nigeria is valued at approximately $4.4 billion.

This loan approval is a significant step towards addressing Nigeria’s electricity deficit and transitioning millions of households and businesses to cleaner and renewable sources of energy.

The EGET-SP will support the implementation of policies aimed at delivering much-needed upgrades of the country’s electricity infrastructure, fast-tracking Nigeria’s efforts to achieve its energy transition goals.

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