- The AfDB approves a $500 million loan for Nigeria’s economic reforms and energy transition, with a focus on fiscal policy and energy sector improvements.
- The funding supports Nigeria’s National Energy Transition Plan and encourages private sector investment in the energy sector.
The African Development Bank Group (AfDB) has approved a $500 million loan for the Federal Government of Nigeria. This funding will, therefore, finance the second phase of the Economic Governance and Energy Transition Support Programme. The Bank’s Board of Directors decided during a meeting in Abidjan, Côte d’Ivoire.
Furthermore, the policy-based operation covers the fiscal years 2024 and 2025. It aims to stimulate inclusive growth through faster structural reforms. Specifically, these reforms will focus on fiscal policy and the energy sector.
Abdul Kamara, Director General of the AfDB Group’s Nigeria office, explained that the programme will accelerate structural reforms in the energy sector. Additionally, it will enhance fiscal policy by increasing non-oil revenues and expanding budgetary space. He added that this phase will consolidate gains from the first phase, which stabilised fiscal operations and launched energy sector reforms.
The AfDB identified three main areas of focus. First, the programme will strengthen fiscal policy by improving public financial management. It will enhance transparency and efficiency in government spending. Consequently, these measures will raise non-oil revenues and reduce fiscal risks.
Second, the loan will fast-track power sector reforms. It aims to reduce energy poverty, expand access to reliable electricity, and improve governance structures. Moreover, the programme will attract private investment into the energy value chain.
Third, the facility will advance Nigeria’s energy transition. It supports the National Energy Transition Plan. Additionally, the plan promotes climate change adaptation and mitigation. It introduces energy-efficiency standards for appliances and updates Nigeria’s Nationally Determined Contribution (NDC) targets for 2026–2030.
The AfDB emphasised that the loan will provide budget support. As a result, it will help the government implement reforms while reducing fiscal impact. Moreover, the programme complements broader macroeconomic reforms under the current administration. It will benefit public institutions and private businesses. Specifically, it aims to enhance the investment climate and foster public-private partnerships.
Direct beneficiaries include the Federal Ministry of Finance, the Federal Inland Revenue Service, the Debt Management Office, the Federal Ministry of Power, the Nigerian Electricity Regulatory Commission (NERC), the National Climate Change Council (NCCC), and the Federal Ministry of Environment. Therefore, the programme will strengthen fiscal consolidation, macroeconomic stability, and energy security.
As of October 31, 2025, AfDB’s active portfolio in Nigeria comprised 52 projects worth $5.1 billion. These projects cover infrastructure, agriculture, governance, energy, and private sector development. Overall, the loan positions Nigeria to accelerate economic reforms while advancing its energy transition goals.