The African Development Bank Group has approved a new $500m loan for the Federal Government of Nigeria to support the second phase of the Economic Governance and Energy Transition Support Programme. The funding is intended to strengthen fiscal reforms, accelerate improvements in the energy sector, and advance the country’s climate action commitments.
The approval was announced in a statement issued on Wednesday by Alexis Adélé of the AfDB’s Communication and External Relations Department. According to the statement, the Bank’s Board of Directors endorsed the loan during a meeting held in Abidjan, and the support package will cover fiscal years 2024 and 2025.
Adélé noted that the loan forms part of a policy-based programme designed to reinforce Nigeria’s economic stability while enabling a more sustainable and resilient energy system. The second phase builds on gains recorded in the earlier phase of the programme, with a sharper focus on reforms that can expand fiscal space and drive long-term energy transformation.
The programme will centre on three major reform pillars. The first focuses on strengthening fiscal policy and public financial management. This includes measures to improve transparency in government spending, enhance budget execution, and boost efficiency within key financial institutions. The goal is to support Nigeria’s efforts to raise non-oil revenues and ensure better use of public resources.
The second component targets comprehensive reforms in the energy sector. The AfDB aims to support initiatives that will expand electricity access, reduce energy poverty, and improve governance within the power industry. The Bank also hopes that these efforts will attract greater private-sector participation, encourage new investments, and create a more stable environment for energy projects nationwide.
The third pillar is dedicated to advancing Nigeria’s energy transition and climate strategy. Through the programme, the AfDB will assist the government in implementing its energy transition plan, promoting cleaner and more efficient energy use, and strengthening policies that address climate change. This will include the introduction of energy-efficiency standards for appliances and support for climate change mitigation and adaptation initiatives. The programme will also help update Nigeria’s Nationally Determined Contribution for the 2026–2030 period to align with global climate goals.
Commenting on the programme, the Director-General of the AfDB’s Nigeria Office, Abdul Kamara, emphasised that the second phase is designed to stimulate inclusive growth by fast-tracking structural reforms in the energy sector and strengthening fiscal policy frameworks. He explained that the new phase will consolidate achievements from the first phase while broadening the scope of reforms needed to reposition the country’s economy.
Direct beneficiaries of the programme include several key government institutions such as the Federal 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 of Nigeria. These agencies are expected to play central roles in rolling out reforms supported by the loan.
Private-sector participants are also expected to benefit from an improved regulatory environment and expanded opportunities for energy investments across Nigeria’s states. By fostering stronger public-private partnerships, the programme aims to unlock new projects that can further drive economic growth and energy access.
As of 31 October 2025, the AfDB had an active portfolio of 52 projects in Nigeria with a total value of $5.1bn. The new $500m facility reinforces the Bank’s long-standing support for Nigeria’s economic governance reforms, power-sector transformation, and commitment to building a sustainable and inclusive economy.
