The African Development Bank has approved a 500 million dollar loan for Nigeria in a move that strengthens the country’s ongoing economic reform efforts and supports its transition toward a more sustainable energy system. The approval reflects the strong confidence of the Bank in Nigeria’s current policy direction and reform commitments.
According to the Bank, the new facility is part of the Economic Governance and Energy Transition Support Programme which is designed to help Nigeria stabilise public finances, improve institutional performance, and address long standing challenges in the power sector.
Focus on Economic Governance
The programme aims to reinforce Nigeria’s fiscal management by improving budget efficiency, strengthening revenue mobilisation, and enhancing transparency across key public institutions. Officials noted that these actions are critical to restoring economic stability and rebuilding investor confidence at a time when Nigeria continues to face inflationary pressures, limited fiscal space, and structural revenue constraints.
The support will help Nigeria implement targeted reforms to reduce leakages, improve expenditure control, and promote accountability in the management of public resources.
Support for Power Sector Reforms
A significant portion of the funding is directed toward Nigeria’s electricity sector which remains a major factor affecting national productivity and competitiveness. The programme seeks to strengthen regulatory frameworks, improve cost reflective tariff structures, encourage private sector participation, and address persistent challenges in metering, transmission capacity, and market liquidity.
The African Development Bank stressed that an efficient and reliable power sector is essential for industrial development, agricultural processing, digital services expansion, and improved household welfare.
Advancing Energy Transition Goals
The new facility also supports Nigeria’s shift toward cleaner and more efficient energy systems. Priority areas include renewable energy deployment, climate resilient infrastructure, improved energy efficiency standards, and the update of Nigeria’s Nationally Determined Contributions for the twenty twenty six to twenty thirty period.
This intervention is expected to help Nigeria reduce dependence on fossil fuel based systems and unlock new opportunities for green investment, innovation, and sustainable development.
Positive Impact on Private Sector Participation
According to the African Development Bank, the support will also benefit private businesses across the country by improving the investment climate, particularly in the energy sector, and facilitating public private partnerships at the subnational level. The Bank stated that an improved regulatory environment and stronger sector governance will encourage long term private capital inflows.
The programme is expected to contribute to fiscal consolidation, macroeconomic stability, and energy security which remain key challenges facing Nigeria. These reforms are considered essential for restoring investor confidence and attracting long term financing for infrastructure and clean energy projects.
AfDB Portfolio in Nigeria
As of 31 October 2025, the African Development Bank’s active portfolio in Nigeria consisted of 52 projects valued at 5.1 billion dollars. These projects span infrastructure, agriculture, governance, energy, and private sector development, demonstrating the Bank’s strong commitment to Nigeria’s long term growth and transformation.
