The Board of Directors of the African Development Bank Group (AfDB) has approved a loan of $500 million to finance the first phase of Nigeria’s Economic Governance and Energy Transition Support Programme (EGET-SP).
The programme is a new initiative aimed at accelerating transformation of the country’s electricity infrastructure and improving access to cleaner sources of energy.
According to a Press Release issued by the development finance institution on the funding support for the country, the loan will help close the financing gap of the Federal Budget in the 2024/25 fiscal year, specifically supporting the implementation of the country’s new Electricity Act and the Nigeria Energy Transition Plan.
It would be recalled that the Nigerian government launched the energy transition plan in August 2022, and in June 2023 passed a new Electricity Act decentralizing the electricity supply industry and setting the stage for increased investments by subnational governments and the private sector.
The energy transition plan envisions the development, by 2050, of 250 GW of installed electricity capacity, 90% of which will be renewable and also to provide clean cooking access to the bulk of the population by 2030, using liquefied petroleum gas (LPG), biogas, biofuels like ethanol, and electric cookstoves.
By its design, the Economic Governance and Energy Transition Support Programme will also support the implementation of these policies, helping deliver much-needed upgrades of Nigeria’s electricity infrastructure, and fast-tracking the country’s efforts to transition millions of households and businesses to cleaner and renewable sources of energy.
The AfDB Group’s $500m support to the Nigeria government is the latest in a series of initiatives aimed at supporting the country’s economic growth, poverty reduction, and climate action efforts.
The EGET-SP) is in line with the Bank Group’s new 10-year Strategy 2024-2033, its High 5s priorities, and the New Deal on Energy for Africa which aims to achieve universal access to modern energy by 2030.
As of July 2024, the AfDB Group’s active portfolio in Nigeria was valued at about $4.4 billion.
