The African Development Bank (AfDB) has approved a $500 million loan to the Federal Government of Nigeria to support the second phase of its Economic Governance and Energy Transition Support Programme. The bank said the funding will help strengthen fiscal policies, push reforms in the energy sector, and promote climate action. The approval was confirmed in a statement issued on Wednesday by the AfDB Communication and External Relations Department, signed by Alexis Adélé, noting that the decision was made during a meeting of the Board of Directors in Abidjan.
According to the statement, “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 programme is structured around three major focus areas. The first is fiscal reforms, with plans to strengthen public financial management systems to improve transparency, efficiency, and the way government resources are spent. This area is expected to help Nigeria enhance accountability and make better use of public funds. The second focus area is energy sector reforms, aimed at accelerating improvements in power generation and distribution.
The AfDB said this will help reduce energy poverty, expand electricity access across the country, attract more private sector investments, and improve governance within the sector. The third component is climate action, which includes support for Nigeria’s energy transition plan, efforts to adapt to and reduce the impact of climate change, and the introduction of energy-efficiency standards for electrical appliances.
The Director-General of the AfDB’s Nigeria Office, Abdul Kamara, explained that the programme is designed to stimulate inclusive economic growth. He 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.” Part of the plan includes updating Nigeria’s Nationally Determined Contribution for the period 2026–2030, ensuring that the country’s climate commitments align with global targets.
Government agencies expected to benefit from the programme include the Ministries of Power, Finance, and Environment, the Federal Inland Revenue Service, the Nigerian Electricity Regulatory Commission, the Debt Management Office, the Office of the Auditor-General, and the National Climate Change Council.
Private sector stakeholders are also expected to benefit from a stronger investment climate and wider opportunities in energy-related projects, especially through public-private partnerships. As of 31 October 2025, the AfDB’s active portfolio in Nigeria consisted of 52 projects with a combined commitment of $5.1 billion. The newly approved loan reinforces the bank’s ongoing support for Nigeria’s economic governance efforts, sustainable energy transition, and push for inclusive growth.
