The African Development Bank Group (AfDB) has approved a substantial $500 million loan to Nigeria, aimed at financing the first phase of the Economic Governance and Energy Transition Support Program (EGET-SP). This program is designed to revamp the country’s electricity infrastructure and enhance access to cleaner energy sources.
In a statement, the AfDB highlighted that this funding will address a crucial gap in the Federal Budget for the 2024/25 fiscal year. It will support the implementation of Nigeria’s new Electricity Act and the Nigeria Energy Transition Plan, which are focused on decentralising the electricity sector and attracting investments from both state governments and the private sector.
Launched in August 2022, Nigeria’s energy transition plan targets the development of 250 gigawatts (GW) of installed electricity capacity by 2050, with 90 per cent of this capacity being renewable. Additionally, by 2030, the plan aims to provide clean cooking solutions to a large segment of the population through liquefied petroleum gas (LPG), biogas, biofuels, and electric cookstoves.
The EGET-SP will facilitate essential upgrades to Nigeria’s electricity infrastructure and accelerate the shift to renewable energy for millions of households and businesses. This move aligns with the AfDB’s Ten-Year Strategy (2024-2033) and its High 5s priorities, as well as the New Deal on Energy for Africa, which seeks to achieve universal access to modern energy by 2030. The AfDB’s active portfolio in Nigeria now totals approximately $4.4 billion.
In related developments, Nigeria’s Federal Government faces significant challenges in its goal to eliminate estimated billing by the end of 2024. Recent data shows a 10 per cent increase in the number of customers on estimated billing, rising from 5.83 million in Q4 2023 to 6.43 million in Q1 2024. This issue underscores the ongoing difficulty in metering all customers effectively despite various initiatives.
The AfDB’s new loan comes amid other international efforts to support Nigeria’s energy sector. The World Bank has recently announced a supervision mission to address the underperformance of a $500 million loan aimed at improving the country’s electricity distribution.
