Nigeria has secured at least $1.25 billion in loans from the World Bank and the African Development Bank (AfDB) to enhance its electricity supply under President Bola Tinubu’s administration.
On December 14, 2023, the World Bank approved the $750 million Distributed Access through Renewable Energy Scale-up (DARES) project in Nigeria. More recently, on July 31, 2024, the AfDB approved a loan of $500 million to the Federal Republic of Nigeria to help transform the country’s electricity infrastructure and improve access to cleaner energy sources.
The loan from the World Bank is structured into three distinct segments, cumulatively forming the $750 million total financial package. This package is segmented into credits of $350 million, $250 million, and $150 million, each earmarked for different facets of the project and subject to currency conversions as necessary.
The primary implementers of the DARES project are the Rural Electrification Agency (REA) and the Lagos State Electricity Board (LSEB), with significant support from the Federal Ministry of Power, the Nigerian Electricity Management Services Agency (NEMSA), the Federal Ministry of Environment, the Nigerian Electrification Regulatory Commission (NERC), and the Federal Ministry of Finance.
According to the press release announcing the loan approval, the $750 million credit from the International Development Association (IDA) is being used to leverage more than $1 billion from private investors and additional funding from different partners.
Before President Bola Tinubu’s tenure, Nigeria had already secured nearly $2 billion in loans from multilateral organizations, especially the World Bank, according to Nairametrics. However, despite these financial commitments, the power sector still struggles, and Nigerians continue to face poor electricity supply.
The latest influx of funds is expected to make significant strides in addressing the country’s long-standing energy challenges by improving infrastructure and expanding access to renewable energy sources.
