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AfDB Sanctions $500 Million Loan to Propel Nigeria’s Energy Sector and Economic Reforms
The African Development Bank (AfDB) has greenlit a $500 million loan to Nigeria’s Federal Government, earmarked for the second phase of the Economic Governance and Energy Transition Support Programme. This initiative is designed to enhance fiscal management, accelerate reforms in the energy sector, and advance climate resilience efforts.
Loan Approval and Timeline
According to Alexis Adélé, spokesperson for the AfDB’s Communication and External Relations Department, the Board of Directors approved the funding during a session held in Abidjan. The loan will cover activities planned for the 2024 and 2025 fiscal years, reinforcing the bank’s ongoing partnership with Nigeria.
Strategic Focus Areas of the Programme
The programme concentrates on three pivotal domains to catalyze Nigeria’s economic and energy transformation:
- Enhancement of Fiscal Policies: Strengthening public financial management frameworks to improve transparency, accountability, and efficiency in government expenditures.
- Energy Sector Overhaul: Driving reforms to modernize the power sector, reduce energy poverty, broaden electricity access, improve regulatory governance, and attract increased private sector investments.
- Climate Action and Energy Transition: Supporting Nigeria’s energy transition roadmap by promoting climate adaptation and mitigation strategies, alongside instituting energy efficiency standards for electrical appliances nationwide.
Insights from AfDB Leadership
Abdul Kamara, Director-General of the AfDB’s Nigeria Office, emphasized that this phase aims to foster inclusive economic growth by expediting structural reforms within the energy sector. Additionally, it seeks to implement progressive fiscal reforms to diversify revenue streams beyond oil and expand fiscal capacity.
“Building on the successes of the initial phase, this programme will accelerate reforms that underpin sustainable growth and fiscal resilience,” Kamara stated.
Aligning Climate Commitments with Global Goals
As part of the programme, Nigeria will revise its Nationally Determined Contribution (NDC) for the 2026-2030 period, ensuring its climate objectives are consistent with international targets under the Paris Agreement.
Beneficiaries and Broader Impact
Key government bodies slated to benefit include the Federal 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.
Moreover, the private sector stands to gain from an improved investment environment and expanded opportunities in energy infrastructure projects, fostering stronger public-private partnerships across Nigerian states.
AfDB’s Ongoing Commitment to Nigeria
As of October 31, 2025, the AfDB’s active portfolio in Nigeria comprises 52 projects with a combined commitment of $5.1 billion. This latest loan reinforces the bank’s dedication to supporting Nigeria’s economic governance reforms, sustainable energy transition, and the creation of a more inclusive and resilient economy.
