The African Development Bank (AfDB) Group has approved a loan of N750 billion ($500) million to Nigeria to support the first phase of the economic governance and energy transition support programme (EGET-SP).

EGET-SP is an initiative aimed at accelerating the transformation of the country's electricity infrastructure and improving access to cleaner sources of energy.

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 decentralising the electricity supply industry and setting the stage for increased investments by subnational governments and the private sector," AfDB said.

"The energy transition plan envisions the development, by 2050, of 250 GW of installed electricity capacity, 90 per cent 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 statement said

It added that "The AfDB $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."