Market News

By Abdullateef Aliyu, Lagos

The African Development Bank Group has approved a new $500 million loan for the Federal Government of Nigeria, pushing the Bank’s total active financial commitment to the country to $5.1 billion as of October 31, 2025.

The fresh facility will finance the second phase of the Economic Governance and Energy Transition Support Programme, designed to strengthen fiscal management, accelerate energy-sector reforms, and advance Nigeria’s climate goals.

In a statement issued by Alexis Adélé of the AfDB’s Communication and External Relations Department, the Bank confirmed that its Board of Directors endorsed the loan during a meeting in Abidjan.

The operation will cover fiscal years 2024 and 2025, deepening reforms initiated in the first phase of the programme.

The initiative focuses on three core strategic pillars.

First, it seeks to deepen fiscal policy reforms by strengthening public financial management systems, improving transparency, and enhancing the efficiency of government spending.

Secondly, it aims to drive energy sector transformation, with emphasis on accelerating improvements in the power engineering space. The objective is to reduce energy poverty, expand electricity access, improve sector governance, and attract increased private-sector investment.

The programme will also support Nigeria’s energy transition and climate action efforts by advancing the implementation of the country’s Energy Transition Plan. It includes measures to promote climate change adaptation and mitigation, as well as the introduction of energy-efficiency standards for electrical appliances nationwide.

Speaking on the approval, the AfDB’s Director-General for Nigeria, Abdul Kamara, said the second phase is expected to stimulate inclusive growth by fast-tracking structural reforms in the energy sector while reinforcing progressive fiscal policies aimed at boosting non-oil revenues and expanding fiscal space.

He noted that the new phase builds on the gains recorded in the initial phase of the programme.

Additionally, the initiative will support the update of Nigeria’s Nationally Determined Contribution (NDC) for the 2026–2030 period to align the nation’s climate commitments with global targets.

Key government institutions 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 of Nigeria.

The private sector is also expected to benefit through an improved investment climate and expanded opportunities for energy projects and public-private partnerships across the country.

With a portfolio of 52 active projects amounting to $5.1 billion, the newly approved loan reinforces the AfDB’s long-standing commitment to Nigeria’s economic governance reforms, sustainable energy transition, and pursuit of a more resilient and inclusive economy.

Previous loans to Nigeria

Nigeria is one of the biggest shareholders of AfDB and the bank has supported Nigeria through several interventions.

It would be recalled that in July, the AfDB announced the disbursement of $500m (N766.7bn) to Nigeria to advance critical power sector reforms.

Also in May, the bank approved a new five-year strategy for Nigeria that will provide about $650 million annually between 2025 and 2030.