With $2bn Portfolio in Nigeria, Islamic Development Bank Seeks FG’s Partnership to Boost Power Infrastructure

Peter Uzoho

Islamic Development Bank (IDB), which currently boasts nearly $2 billion active portfolios across various sectors in Nigeria, expressed interest in partnering with the federal government to address critical infrastructure gaps in the power industry, with ready funds to support the country’s energy development as part of a new Country Engagement Framework.

 A delegation from IDB, led by the financial institution’s Lead Global Energy Specialist, Alagi Gaye, disclosed the move during a courtesy visit to Minister of Power, Chief Adebayo Adelabu, in Abuja, Tuesday, according to a statement by the minister’s Special Adviser on Strategic Communications and Media Relations, BolajiTunji.

Gaye revealed that IDB had an active portfolio of nearly $2 billion across various sectors in Nigeria, including energy, transport, agriculture, and education. But he stressed the bank’s desire to deepen its involvement in power infrastructure. 

He explained that the bank was developing its first-ever Country Engagement Framework for Nigeria since the nation joined IDB in 2005.

Unlike its previous project-based approach, Gaye said the bank now sought programme-based interventions that aligned with Nigeria’s sectoral policies, regulations, and challenges.

He acknowledged the country’s significant electricity access gap and affirmed IDB’s commitment to incentivising private-sector investment in the sector. 

In response, Adelabuemphasised the need for substantial investment to ensure stable, efficient, and affordable electricity for Nigerians.

He stated that improving power supply was a top priority for President Bola Tinubu’s administration, citing the Electricity Act of 2023 as a key step towards liberalising the sector.

Adelabu highlighted ongoing reforms, including the Presidential Power Initiative (PPI)—a $2.3 billion agreement with Germany’s Siemens Energy to modernise Nigeria’s aging power grid.

He stated that the pilot phase, involving the installation of 10 power transformers and 10 mobile substations, had already improved grid stability, with plans for further expansion over the next few years.

He told his visitors that the government was also working on a “Super Grid” project to tackle redundancy and had secured support from the World Bank and African Development Bank (AfDB) for transmission upgrades. 

The minister also addressed challenges in the distribution segment, where inefficiencies persisted, despite privatisation.

He informed the IDB team that the government retained a 40 per cent stake in distribution companies (Discos) and was exploring partnerships to improve their performance.

According to him, a 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 aimed to import two million meters annually over five years. 

Adelabu further discussed Nigeria’s “Mission 300” programme, which promotes renewable energy solutions for rural electrification.

He stated, “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 emphasised that Africa’s minimal carbon footprint meant Nigeria’s renewable energy push was driven more by necessity than emission targets. 

He welcomed IDB’s support and urged the bank to review feasibility studies for proposed projects.

Adelabu expressed confidence in the partnership, citing the bank’s credibility as a financial institution.

The discussions, according to the statement, underscored the potential for collaboration in transforming Nigeria’s power sector and ensuring sustainable energy access for citizens.