By Stanley Onyeka, Lagos
The Board of Directors, African Development Bank (AfDB) Group has approved a loan of $500 million to the Nigerian Government to finance the first phase of the Economic Governance and Energy Transition Support Program (EGET-SP).
In a statement, the Bank described the EGET-SP as “a new programme aimed at accelerating transformation of the country’s electricity infrastructure and improving access to cleaner sources of energy.”
It also explained that “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.”
The $500 million loan is the latest in a series of initiatives aimed at supporting Nigeria’s economic growth, poverty reduction, and climate action efforts.
As of July 2024, the AfDB’s active portfolio in Nigeria was valued at about $4.4 billion.
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.
Background
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 of a 250-gigawatt installed electricity capacity by 2050, of which 90% will be renewable.
It will provide clean cooking access to the bulk of the population by 2030, using liquefied petroleum gas (LPG), biogas, biofuels like ethanol, and electric cookstoves.
The EGET-SP is conceived to 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 Programme is in line with the Bank Group’s new Ten-Year Strategy 2024-2033, its High 5s priorities, and the New Deal on Energy for Africa, which seeks to achieve universal access to modern energy by 2030.
