The African Development Bank has approved a $500 million loan to the Federal Government of Nigeria to support the second phase of the Economic Governance and Energy Transition Support Programme, a multi-year initiative aimed at strengthening fiscal stability, advancing power sector reforms and accelerating climate action efforts.
The approval was confirmed in a statement issued on Wednesday by Alexis Adélé of the AfDB’s Communication and External Relations Department. According to the bank, its Board of Directors endorsed the financing package during a meeting in Abidjan, covering Nigeria’s 2024 and 2025 fiscal years.
“The Board of Directors of the African Development Bank Group, meeting in Abidjan, approved a $500 million loan to the Government of the Federal Republic of Nigeria to finance the second phase of the Economic Governance and Energy Transition Support Programme. The policy-based operation is for fiscal years 2024 and 2025,” the statement read.
Focus Areas of the Programme
The support programme is structured around three core reform pillars:
1. Fiscal Reforms
This component seeks to strengthen public financial management systems, enhance transparency, improve government spending efficiency, and support policy measures aimed at boosting non-oil revenues.
2. Energy Sector Reforms
The bank will assist Nigeria in fast-tracking improvements in electricity generation, transmission and distribution. The effort is expected to reduce energy poverty, expand access to electricity, attract private sector participation, and improve overall sector governance.
3. Climate Action
The initiative will support the implementation of Nigeria’s energy transition plan, scale up climate adaptation and mitigation efforts, and introduce new energy-efficiency standards for electrical appliances. It will also help update Nigeria’s Nationally Determined Contribution (NDC) for the 2026–2030 period to align national commitments with global climate goals.
Inclusive Growth a Priority — AfDB
The Director-General of the AfDB’s Nigeria Country Office, Abdul Kamara, said the loan would consolidate gains from the first phase of the programme and push forward key structural reforms.
“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,” he said. “The new phase will consolidate and build on the achievements of the first phase.”
Beneficiaries and Implementation
Key government agencies expected to benefit from the programme include the Ministry of Power, Ministry of Finance, Ministry of Environment, Federal Inland Revenue Service, Nigerian Electricity Regulatory Commission, Debt Management Office, and the Office of the Auditor-General, alongside the National Climate Change Council.
The AfDB noted that private sector operators will also gain from a more stable investment environment and expanded opportunities in energy-related projects, particularly through public-private partnerships.
Nigeria Remains a Major AfDB Partner
As of 31 October 2025, the AfDB’s active portfolio in Nigeria comprised 52 projects totalling $5.1 billion, making the country one of the bank’s largest beneficiaries on the continent.
The latest loan underscores the bank’s continued commitment to supporting Nigeria’s economic governance reforms, its transition to sustainable energy, and its broader efforts to drive inclusive economic growth.
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