The Board of Directors of the African Development Bank Group (AfDB) has approved a $500 million loan to Nigeria to finance the first phase of the Economic Governance and Energy Transition Support Program (EGET-SP).
This new program aims to transform the country’s electricity infrastructure and improve access to cleaner energy sources.
The loan will help bridge the financing gap in the 2024/25 fiscal year budget, supporting the implementation of Nigeria’s new Electricity Act and the Nigeria Energy Transition Plan.
Launched in August 2022, the energy transition plan was further bolstered by the passage of a new Electricity Act in June 2023, which decentralized the electricity supply industry and paved the way for increased investment from subnational governments and the private sector.
The energy transition plan envisions developing 250 GW of installed electricity capacity by 2050, with 90 percent coming from renewable sources. By 2030, it aims to provide clean cooking access to most of the population using liquefied petroleum gas (LPG), biogas, biofuels like ethanol, and electric cookstoves.
The Economic Governance and Energy Transition Support Program will also aid in implementing these policies, helping upgrade the nation’s electricity infrastructure and accelerating the transition of millions of households and businesses to cleaner, renewable energy sources.
AfDB’s $500 million support to Nigeria is part of a series of initiatives aimed at supporting the country’s economic growth, poverty reduction, and climate action efforts.
The EGET-SP aligns with the Bank Group’s new 10-Year Strategy (2024-2033), its High 5 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.
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