By SCM Finance Correspondent
ABIDJAN, Ivory Coast—The African Development Bank Group (AfDB) has approved a $500 million loan to the Federal Government of Nigeria, marking the second phase of the Economic Governance and Energy Transition Support Programme.
The policy-based operation, greenlit by the AfDB Board of Directors in Abidjan, is slated to cover the fiscal years 2024 and 2025.
The financing is designed to accelerate structural reforms necessary to spur inclusive growth, with a dual focus on the energy sector and progressive fiscal policy to expand Nigeria’s financial capacity.
”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,” stated Abdul Kamara, Director General of the Office of the African Development Bank Group in Nigeria. “The new phase will consolidate and build on the achievements of the first phase.”
The programme is structured around three critical areas:
Deepening Fiscal Policy Reforms: This involves strengthening public financial management systems and boosting the transparency and efficiency of public spending. The objective is to enhance Nigeria’s ability to generate and manage non-oil revenue, crucial for long-term fiscal stability.
Accelerating Power Sector Reform: The initiative will focus on reducing energy poverty, expanding energy access, and improving sector governance to attract vital private investment.
Supporting Energy Transition: Measures will be introduced to promote climate change adaptation and mitigation, including the rollout of energy-efficiency standards for electrical appliances.
This effort will also involve updating Nigeria’s Nationally Determined Contribution (NDC) for the 2026–2030 period, reinforcing the country’s commitment to global climate goals.
The loan is expected to directly benefit key governmental bodies, including the Federal Ministry of Power, the Federal Ministry of Finance, the Federal Inland Revenue Service, the Nigerian Electricity Regulatory Commission (NERC), and the National Climate Change Council of Nigeria (NCCC).
Furthermore, the programme is expected to yield substantial benefits for the private sector. Private businesses are set to gain from an improved investment climate and new opportunities within the energy sector at the state level, alongside the creation of an environment more conducive to public-private partnerships (PPPs).
As of October 31, 2025, the African Development Bank Group’s active portfolio in Nigeria comprised 52 projects with a total commitment of $5.1 billion, underscoring the Bank’s continued partnership with Africa’s largest economy.
