Nigeria secures $500 million AfDB loan to boost energy transition

The African Development Bank (AfDB) has approved a $500 million loan to support Nigeria’s economic governance reforms and energy transition efforts.

The financing, approved by the Bank’s board in Abidjan, is budget support aimed at boosting non-oil revenues and widening fiscal space. It will fund the second phase of Nigeria’s Economic Governance and Energy Transition Support Programme for 2024 and 2025.

“The second phase of the programme aims to stimulate inclusive growth by accelerating structural reforms in the energy sector, while supporting progressive fiscal reforms to boost non-oil revenues and expand fiscal space,” the bank said.

The programme focuses on three areas:

• Deepening fiscal reforms by strengthening public financial management and improving transparency and efficiency in public spending.

• Accelerating power sector reforms to cut energy poverty, improve access, strengthen governance and attract private investment.

• Implementing the energy transition plan, including new energy-efficiency standards for appliances and broader climate adaptation and mitigation measures.

Nigeria will also update its Nationally Determined Contribution (NDC) for the 2026–2030 period.

Direct beneficiaries include the ministries of Power, Finance and Environment; the Federal Inland Revenue Service; the Auditor-General’s Office; the Debt Management Office; the National Climate Change Council; the Nigerian Electricity Regulatory Commission; and other agencies involved in economic and social policy.

Private firms are expected to benefit from a better investment climate and expanded opportunities in the power sector, including improved conditions for public-private partnerships.

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The AfDB said the programme aligns with its “High 5” priorities—Light Up and Power Africa, Feed Africa, Industrialize Africa, Integrate Africa and Improve the Quality of Life for the People of Africa—supported by cross-cutting goals such as gender equality, youth investment, climate resilience, and stronger economic governance.

Under its 2024–2033 strategy, the Bank plans to deepen its role as a key development partner and expand investment in regional and global public goods.

Abdul Kamara, the Bank’s Director General in Nigeria, said the new phase would consolidate gains from the first. As of 31 October 2025, AfDB’s active portfolio in Nigeria comprised 52 projects with total commitments of $5.1 billion.