The African Development Bank Group has approved a five-hundred-million-dollar loan to the Federal Government of Nigeria to finance the second phase of the Economic Governance and Energy Transition Support Programme. The approval followed a meeting of the Bank’s Board of Directors in Abidjan and is expected to strengthen fiscal reforms and accelerate Nigeria’s transition toward a more stable and sustainable energy sector.
According to the Bank, the policy-based operation will cover the 2024 and 2025 fiscal years and is designed to stimulate inclusive growth by deepening structural reforms. The second phase of the programme builds on earlier efforts that stabilised fiscal operations and initiated important changes in the energy sector. The Bank explained that the intervention will strengthen public financial management, improve transparency in government spending, and support measures aimed at expanding Nigeria’s non-oil revenue base. These reforms are intended to reduce fiscal risks and create wider budgetary space for development spending.
The programme will also drive reforms across the power sector, where persistent challenges such as low generation capacity, transmission inefficiencies, and governance gaps continue to hinder national development. The facility aims to enhance power access, improve sector governance,and encourage private investment across the electricity value chain. The Bank noted that expanding reliable power remains central to reducing energy poverty and improving the operating environment for households and businesses, including MSMEs that depend on stable electricity to scale their operations.
In addition to fiscal and power sector reforms, the facility will support Nigeria’s broader energy transition. This includes backing the implementation of the National Energy Transition Plan, promoting climate adaptation and mitigation measures, updating national climate commitments for the 2026 to 2030 cycle and supporting energy-efficiency standards for electrical appliances. These measures are expected to help Nigeria align with global climate targets while improving domestic energy resilience.
The direct beneficiaries of the programme include key economic and energy institutions, such as the ministries responsible for finance, power, and the environment, the tax authority, the debt office, the electricity regulatory agency, and the national climate council. The AfDB stated that the reforms will also support private businesses across the country by improving the investment climate and creating opportunities for public–private partnerships, particularly at the state level.
The Bank added that the loan will provide essential budget support to help the government implement these reforms while mitigating short-term fiscal pressures. It emphasised that fiscal consolidation, macroeconomic stability and energy security remain central to Nigeria’s economic recovery efforts and are vital for restoring investor confidence. The programme is also expected to attract long-term financing for infrastructure and green energy projects, which could strengthen the productivity and resilience of the private sector.
As of the end of October 2025, the AfDB had an active portfolio of fifty-two projects in Nigeria valued at over five billion dollars, spanning infrastructure, agriculture, governance, energy and private sector development.
