(AfDB) - The Board of Directors of the African Development Bank Group has approved a loan of $500 million to the Federal Republic of Nigeria, to finance the first phase of the Economic Governance and Energy Transition Support Program (EGET-SP), a new program aimed at accelerating transformation of the country’s electricity infrastructure and improving access to cleaner sources of energy.

The loan will help close the financing gap of the Federal Budget in the 2024/25 fiscal year, specifically 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.

The energy transition plan envisions the development, by 2050, of 250 GW of installed electricity capacity, 90% 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 Program 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 Economic Governance and Energy Transition Support Program (EGET-SP) is in line with the Bank Group's new Ten-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.

As of July 2024, the African Development Bank Group’s active portfolio in Nigeria is valued at about $4.4 billion.