By Nchetachi Chukwuajah
The African Development Bank (AfDB) has approved a $500 million loan to the Federal Government of Nigeria to fund the second phase of its Economic Governance and Energy Transition Support Programme.
This was disclosed in a statement issued on Wednesday, November 26, by the AfDB Communication and External Relations Department, Alexis Adélé.
Adélé said the Board of Directors approved the loan at a meeting in Abidjan, covering the 2024 and 2025 fiscal years.
According to the statement, the initiative is designed to strengthen fiscal policies, drive energy sector reforms, and promote climate action.
The statement read: “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 first of the three key areas the programme will focus on is fiscal reforms, which involve strengthening public financial management systems to improve transparency, efficiency, and government spending.
The second is energy sector reforms, which involve accelerating improvements in power generation and distribution to reduce energy poverty, expand electricity access, attract private investment, and enhance sector governance.
The third is climate action, which involves supporting Nigeria’s energy transition plan, promoting climate change adaptation and mitigation, and introducing energy-efficiency standards for electrical appliances.
According to the Director-General of the AfDB’s Nigeria Office, Abdul Kamara, the programme aims to stimulate inclusive growth by fast-tracking structural reforms in the energy sector and supporting fiscal policy measures to boost non-oil revenues.
Kamara 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.”
The programme will also update Nigeria’s Nationally Determined Contribution for 2026–2030 to align with global climate targets.
The agencies of government expected to benefit 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.
Also, private sector actors will gain from an improved investment in climate and expanded opportunities in energy projects, particularly through public-private partnerships.
The AfDB’s active portfolio in Nigeria as of October 31, 2025, comprises 52 projects with a total commitment of $5.1 billion.
