The African Development Bank (AfDB) Group has approved a loan of $500 million to Nigeria to finance the first phase of the economic governance and energy transition support programme (EGET-SP).
EGET-SP is an initiative aimed at accelerating transformation of the country’s electricity infrastructure and improving access to cleaner sources of energy.
On August 24, 2022, the federal government launched Nigeria’s energy transition plan as a major pathway in achieving universal energy access by 2030 and a carbon-neutral economy by 2060.
The government said the plan was designed to tackle energy poverty and climate change crisis, as well as deliver sustainable development goal seven (SDG7) by 2030 and net zero by 2060.
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The plan will, among other things, lift 100 million people out of poverty, reduce Nigeria’s carbon footprint, drive economic growth and create jobs, according to the government
In a statement on Thursday, AfDB said the loan will help close the financing gap of the government’s budget in the 2024/2025 fiscal year, particularly supporting the implementation of the country’s new Electricity Act and the Nigeria 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.
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“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.”
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The bank said EGET-SP is in line with its new 10-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″.
AfDB said as of July 2024, its active portfolio in Nigeria is valued at about $4.4 billion.
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