The Islamic Development Bank (IDB) has expressed interest in partnering with the Nigerian Government to address critical infrastructure gaps in the Power sector.
This will be done with ready funds to support the country’s energy development as part of a new Country Engagement Framework.
Officials of the Bank from the Jeddah-based financial institution, led by Alagi Gaye, disclosed this during a courtesy visit to Nigeria’s Minister of Power, Adebayo Adelabu, in Abuja, the nation’s capital.
According to Gaye, the partnership would address critical infrastructure gaps in Nigeria’s Power sector.
Gaye revealed that the bank has an active portfolio of nearly $2 billion across various sectors in Nigeria, including Energy, Transport, Agriculture and Education.
Gaye explained that the bank is developing its first-ever Country Engagement Framework for Nigeria since the nation joined the IDB in 2005.
“Unlike its previous project-based approach, the bank now seeks program-based interventions that align with Nigeria’s sectoral policies, regulations, and challenges” He explained.
He acknowledged the country’s significant electricity access gap, affirming IDB’s commitment to incentivising private-sector investment in the sector.
In response, Nigeria’s Minister of Power, Adebayo Adelabu, emphasized the need for substantial investment to ensure stable, efficient, and affordable electricity for Nigerians.
He noted that improving power supply remains a top priority for Nigeria’s President, Bola Ahmed Tinubu’s administration, citing the Electricity Act of 2023 as a key step toward liberalizing the Power sector.
Adelabu also highlighted ongoing reforms, including the Presidential Power Initiative (PPI) – a $2.3 billion agreement with Germany’s Siemens Energy to modernize Nigeria’s aging power grid.
He said that the pilot phase, involving the installation of 10 power transformers and 10 mobile substations, has already improved grid stability, with plans for further expansion over the next few years.
The Minister disclosed that the government is also working on a “Super Grid” project to tackle redundancy and has secured support from the World Bank and African Development Bank (AfDB) for transmission upgrades.
Addressed challenges in the electricity distribution segment, where inefficiencies persist despite privatization, Adelabu said that thr government retains over 40 percent stake in Distribution Companies (DisCos) and is exploring partnerships to improve their performance.
He stated that major concern is the metering gap, with only six million meters deployed out of 13 million registered consumers.
To address this, the minister said “the government launched the Presidential Metering Initiative (PMI), which aims to import two million meters annually over five years”
Adelabu further discussed Nigeria’s “Mission 300” program, which he said promotes renewable energy solutions for rural electrification”
“Given the difficulty of extending the national grid to remote areas, the government is deploying solar home systems and mini-grids to power households, schools, and healthcare facilities while supporting agricultural activities”
While acknowledging global climate concerns, the Minister further emphasised that Africa’s minimal carbon footprint means Nigeria’s renewable energy push is driven more by necessity than emission targets
The Islamic Development Bank is a multilateral development finance institution located in Jeddah, Saudi Arabia and focuses on impactful investments in areas like electricity access, aligning with its broader mission to promote comprehensive human development.
The IDB’s involvement in energy development aligns with its commitment to the 2030 Sustainable Development Agenda, which emphasizes the need for increased cooperation, mobilization of private finance and improved public spending efficiency in development activities.
Olusola Akintonde