Business a.m.
The African Development Bank Group (AfDB) board of directors has approved a loan of $500 million to Nigeria, funding the initial phase of the Economic Governance and Energy Transition Support Programme (EGET-SP), a new initiative designed to hasten the transformation of Nigeria’s electricity infrastructure and facilitate access to more sustainable energy sources.
According to the AfDB, the loan is geared towards bridging the funding gap of the country’s federal budget for the 2024/25 fiscal year. Specifically, the loan will support the execution of the country’s recently enacted Electricity Act and the Nigeria Energy Transition Plan.
In August 2022, the Nigerian government officially unveiled its energy transition plan. Building on this momentum, in June 2023, the government passed a new Electricity Act, which was designed to decentralise the electricity supply industry and foster increased investment by subnational governments and private sector entities
The Nigerian energy transition plan envisages the development of a massive 250 GW of installed electricity capacity by 2050, with 90 percent of that capacity to be derived from renewable sources. This plan also aims to ensure that the vast majority of the population has access to clean cooking by 2030, through a multi-faceted approach involving the utilisation of liquefied petroleum gas (LPG), biogas, biofuels such as ethanol, and electric cookstoves.
In addition to facilitating the implementation of the energy transition plan and the Electricity Act, the Economic Governance and Energy Transition Support Programme will play a pivotal role in strengthening the quality and resilience of Nigeria’s electricity infrastructure. The programme will contribute to the deployment of upgrades across the country’s electricity grid, resulting in enhanced reliability and accessibility, while also speeding up Nigeria’s transition towards renewable energy sources.Â
The AfDB’s recent $500 million loan to Nigeria represents the latest in a string of initiatives aimed at fostering economic growth, reducing poverty, and promoting climate action in the country.Â
The Economic Governance and Energy Transition Support Programme is fully aligned with the AfDB’s new 10-year strategy for 2024-2033, which focuses on delivering impact at scale across Africa, as well as the High 5s development priorities. This initiative also falls in line with the new deal on energy for Africa, which aims to achieve universal access to modern energy sources for all Africans by 2030.
As of July 2024, the African Development Bank Group’s active portfolio in Nigeria is valued at about $4.4 billion.Â
