Nigeria Gets $500m AfDB Loan to Boost Energy Sector
AfDB supports Nigeria's energy transition with $500m funding...
AfDB approves $500m loan for Nigeria's energy transition plan, aiming to enhance electricity infrastructure, promote cleaner energy, and achieve universal energy access by 2030.
The African Development Bank (AfDB) has granted a $500 million loan to Nigeria to support the initial phase of the Economic Governance and Energy Transition Support Programme (EGET-SP). This program aims to enhance the country's electricity infrastructure and promote the use of cleaner energy sources.
Nigeria's Federal Government launched its energy transition plan in August 2022, with the ambitious goal of achieving universal energy access by 2030 and a carbon-neutral economy by 2060. The plan seeks to address energy poverty and climate change, aligning with Sustainable Development Goal 7 (SDG7) and targeting net zero emissions by 2060.
The energy transition plan has four key objectives: eradicating poverty for 100 million Nigerians, decreasing the country's carbon emissions, stimulating economic growth, and generating employment opportunities.
According to the African Development Bank's (AfDB) statement on August 1, the $500 million loan will bridge the budget shortfall for the 2024/2025 fiscal year, specifically supporting the implementation of the new Electricity Act and the government's energy transition plan.
“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,” AfDB said.
“The energy transition plan envisions the development, by 2050, of 250 GW of installed electricity capacity, 90 percent of which 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 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 bank group's $500m support to the Federal Government of Nigeria is the latest in a series of initiatives aimed at supporting the country's economic growth, poverty reduction, and climate action efforts.”
The African Development Bank (AfDB) noted that the Economic Governance and Energy Transition Support Programme (EGET-SP) aligns with its 2024-2033 strategy, key priorities, and the New Deal on Energy for Africa, which targets universal access to modern energy by 2030.
As of July 2024, the AfDB's total active investments in Nigeria amount to approximately $4.4 billion, demonstrating the bank's significant commitment to supporting the country's development.
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