The African Development Bank Group (AfDB) has approved a loan of $500 million to the Federal Republic of Nigeria.
According to a statement from the bank, this funding will finance the first phase of the Economic Governance and Energy Transition Support Program (EGET-SP), aimed at transforming the country’s electricity infrastructure and improving access to cleaner energy sources.
The statement read: “The Board of Directors of the African Development Bank Group has approved a loan of $500 million to the Federal Republic of Nigeria, to finance the first phase of the Economic Governance and Energy Transition Support Program (EGET-SP), a new program aimed at accelerating transformation of the country’s electricity infrastructure and improving access to cleaner sources of energy.”
The statement also noted that the loan will help close the financing gap in the Federal Budget for the 2024/25 fiscal year, specifically supporting the implementation of Nigeria’s new Electricity Act and the Nigeria Energy Transition Plan. These initiatives are designed to decentralize the electricity supply industry and attract investments from subnational governments and the private sector.
Nigeria launched its energy transition plan in August 2022, and in June 2023, passed the new Electricity Act. The plan envisions the development of 250 GW of installed electricity capacity by 2050, with 90% of this capacity being renewable.
By 2030, it aims to provide clean cooking solutions to the bulk of the population using liquefied petroleum gas (LPG), biogas, biofuels like ethanol, and electric cookstoves.
The EGET-SP will support these policies by delivering much-needed upgrades to Nigeria’s electricity infrastructure and fast-tracking the transition of millions of households and businesses to cleaner, renewable energy sources.
The Bank Group’s $500 million support to Nigeria is the latest in a series of initiatives aimed at supporting the country’s economic growth, poverty reduction, and climate action efforts. The EGET-SP aligns with the AfDB’s new Ten-Year Strategy (2024-2033), its High 5s priorities, and the New Deal on Energy for Africa, which seeks to achieve universal access to modern energy by 2030.
As of July 2024, the African Development Bank Group’s active portfolio in Nigeria is valued at about $4.4 billion.
