The African Development Bank (AfDB) has approved a fresh $500 million loan to the Federal Government of Nigeria to finance the second phase of the Economic Governance and Energy Transition Support Programme, aimed at strengthening fiscal policies, driving energy sector reforms, and promoting climate action. The policy-based operation will cover fiscal years 2024 and 2025.
The loan was approved by the AfDB Board of Directors during a meeting in Abidjan, Côte d’Ivoire. Speaking on the approval, the Director-General of the AfDB’s Nigeria Office, Abdul Kamara, said, “The second phase of the programme aims to stimulate inclusive growth by accelerating structural reforms in the energy sector, while supporting progressive reforms of fiscal policy to boost non-oil revenues and expand fiscal space. The new phase will consolidate and build on the achievements of the first phase.”
The programme targets three key strategic areas. First, it seeks to deepen fiscal policy reforms by strengthening public financial management systems and enhancing the transparency and efficiency of government spending.
Second, it will accelerate reforms in the power engineering sector, aiming to reduce energy poverty, expand access to electricity, improve sector governance, and attract greater private investment.
Third, the initiative will support Nigeria’s energy transition plan, promoting climate change adaptation and mitigation measures, including the introduction of energy-efficiency standards for electrical appliances.
It will also update the country’s Nationally Determined Contribution (NDC) for the 2026–2030 period, aligning Nigeria’s climate commitments with global targets.
“The programme is designed to create an enabling environment for public-private partnerships and to improve the investment climate across the country,” Kamara added.
The programme’s direct beneficiaries include the Federal Ministries of Power, Finance, and Environment, the Federal Inland Revenue Service (FIRS), the Nigerian Electricity Regulatory Commission (NERC), the Debt Management Office (DMO), the Office of the Auditor General of the Federation, and the National Climate Change Council of Nigeria (NCCC).
Private businesses are also expected to benefit from enhanced investment opportunities in the energy sector across the states of the federation.
As of 31 October 2025, the AfDB’s active portfolio in Nigeria comprised 52 projects with a total commitment of $5.1 billion.
The latest $500 million loan represents the second half of a $1 billion budget support facility, with the first $500 million disbursed last year to support Nigeria’s ongoing macroeconomic reforms.
“The board of the African Development Bank Group remains committed to supporting Nigeria’s economic governance and sustainable energy transition. This programme demonstrates our continued partnership with the Nigerian government to build a more resilient and inclusive economy,” said Alexis Adélé, AfDB Communication and External Relations Department official.
With this funding, Nigeria aims to accelerate structural reforms in both fiscal policy and energy infrastructure while fostering climate resilience and attracting private sector investment.
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