AfDB approves $500m loan to Nigeria to strengthen fiscal policies, energy reforms, and climate action under the Economic Governance and Energy Transition programme.

The African Development Bank Group has approved a $500 million loan to the Federal Government of Nigeria to finance the second phase of the Economic Governance and Energy Transition Support Programme, aimed at strengthening fiscal policies, accelerating energy sector reforms, and promoting climate action.

Also read: AfDB to disburse $500 million to Nigeria by year-end

A statement issued by AfDB’s Communication and External Relations Department, signed by Alexis Adélé on Wednesday, confirmed that the loan was approved during a Board of Directors meeting in Abidjan.

The funding will cover fiscal years 2024 and 2025.

Abdul Kamara, Director-General of the AfDB’s Nigeria Office, said the programme’s second phase will stimulate inclusive growth by fast-tracking structural reforms in the energy sector while supporting progressive fiscal policy reforms designed to boost non-oil revenues and expand fiscal space.

“The new phase consolidates and builds on the achievements of the first phase,” Kamara said, highlighting the programme’s dual focus on fiscal consolidation and energy sector transformation.

The initiative targets three key strategic areas.

First, it aims to deepen fiscal policy reforms by strengthening public financial management systems and enhancing transparency and efficiency in government spending.

Second, the programme seeks to accelerate energy sector improvements, reduce energy poverty, expand electricity access, strengthen sector governance, and attract private investment.

Third, the programme will advance energy transition and climate action, supporting the implementation of Nigeria’s energy transition plan, promoting climate change adaptation and mitigation, and introducing energy-efficiency standards for electrical appliances.

Key government agencies set to benefit include 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.

The programme also aims to improve the investment climate for private sector actors through enhanced public-private partnerships in energy projects across states.

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As of 31 October 2025, the AfDB had 52 active projects in Nigeria with a total commitment of $5.1 billion, underscoring its continued support for Nigeria’s economic governance reforms, sustainable energy transition, and inclusive growth initiatives.