Nigeria has secured $1.25 billion in loans from the World Bank and the African Development Bank (AfDB) to enhance the country’s electricity infrastructure, under the leadership of President Bola Tinubu.
On December 14, 2023, the World Bank approved a $750 million loan for the Distributed Access through Renewable Energy Scale-up (DARES) project.
More recently, on July 31, 2024, the AfDB approved a $500 million loan aimed at transforming Nigeria’s electricity sector, with a focus on improving access to cleaner energy sources.
The World Bank’s $750 million DARES loan is structured into three segments—$350 million, $250 million, and $150 million—each dedicated to different aspects of the project, which is expected to leverage over $1 billion from private investors and other partners.
The initiative, spearheaded by the Rural Electrification Agency (REA) and the Lagos State Electricity Board (LSEB), aims to provide over 17.5 million Nigerians with better access to electricity through renewable energy solutions.
“This project represents a significant step towards addressing Nigeria’s electricity access deficit,” said an official statement from the Federal Ministry of Power.
The $500 million loan from the AfDB will finance the first phase of the Economic Governance and Energy Transition Support Program (EGET-SP), which supports Nigeria’s new Electricity Act and Energy Transition Plan.
These reforms are designed to decentralize the electricity supply industry and attract investment from subnational governments and the private sector.
The funding will also help close the financing gap in the Federal Budget for the 2024/25 fiscal year, ensuring that critical reforms in the energy sector can proceed.
Despite these substantial financial commitments, Nigeria’s power sector continues to face challenges, with widespread concerns about the reliability of electricity supply across the nation.
