The African Development Bank Group (AfDB) has approved a US$500 million loan to the Government of Nigeria to fund the second phase of the Economic Governance and Energy Transition Support Programme (EGET SP).
The financing is designed to cover the 2024 and 2025 fiscal years and aims to support reforms across fiscal policy, governance, and the energy sector.
Under the agreement, one of the primary objectives is to deepen fiscal policy reforms by strengthening public financial management systems and promoting transparency and efficiency in government spending.
The hope is this will help Nigeria increase non-oil revenues, expand fiscal space and reduce dependence on oil income which is a critical move as the country seeks to diversify its revenue base.
At the same time, the loan will support a major overhaul of the power sector. The EGET SP’s second phase aims to accelerate reforms to tackle energy poverty, expand access to reliable electricity, improve sector governance, and attract private sector investment into the energy value chain.
In Nigeria where unreliable electricity remains a serious constraint on businesses and households such reforms could have far reaching effects on productivity, quality of life, and economic growth.
Moreover, part of the programme is geared toward implementing the country’s broader energy transition agenda. The loan will support measures such as introducing energy efficiency standards for electrical appliances, and updating Nigeria’s national climate commitments (Nationally Determined Contribution) for the 2026–2030 period.
This thrust towards climate resilient policies aligns Nigeria with global trends in sustainable energy and environmental responsibility.
Direct beneficiaries of the programme include several government institutions: the Ministries of Power, Finance, Environment; the Federal Inland Revenue Service; the Office of the Auditor General; the Debt Management Office; the National Climate Change Council of Nigeria (NCCC); and the Nigerian Electricity Regulatory Commission (NERC), among others. But the support is also expected to benefit private businesses across Nigeria, by improving the regulatory and investment climate particularly in the energy and power sector and by facilitating public private partnerships at state and community levels.
As of 31 October 2025, the AfDB’s active portfolio in Nigeria comprises 52 projects, with total commitments amounting to US$5.1 billion. The new loan under EGET SP is therefore another major step in a broader engagement aimed at driving structural reforms, energy access, and economic stability.
For ordinary Nigerians households, small businesses, and entrepreneurs this development could translate into meaningful improvements over time: more stable electricity supply, fewer outages, lower power costs, and better conditions for business operations.
For the country at large, successfully deploying this loan could mark progress toward diversifying the economy, reducing dependence on oil, expanding sustainable energy access, and strengthening fiscal governance.
Whether the promise of this loan will materialize depends on effective implementation: transparent public spending, accountability from institutions, genuine reforms in the power sector, and close collaboration between public and private sectors. If those pieces come together, this $500 million could help pave the way for a more resilient, energy-secure, and economically diversified Nigeria.
AfDB grants Nigeria $500 million to accelerate economic, energy and power reforms
