The Board of Directors of the African Development Bank (AfDB or the Bank) has approved a financing package of US$100 million, comprising US$80 million loan and US$20 million equity for the rehabilitation of the Kainji and Jebba hydro plants to increase available capacity from the current available capacity of 917 MW to installed capacity of 1,338.4 MW. The Kainji and Jebba plants are one of Nigeria's cheapest and steadiest suppliers of electricity.

The bank's financing is rooted in the New Deal on Energy for Africa, which is founded on the bank's High 5 strategy on Lighting up and powering Africa. It is also aligned with Nigeria's national strategic priorities and Vision 2020 on improved access to electricity and diversification of energy sources.

The AfDB, through this inaugural private sector power transaction in the country, aims to play a role in not only increasing generation capacity, but also, and more importantly, contributing to the addition of green power to the grid in a country traditionally dependent on thermal power. It is noted that, with the support of the Bank and other development finance institutions, the federal government of Nigeria's ongoing broad power sector reforms are expected to enhance successful private sector participation in the sector.

The project is expected to deliver strong development outcomes in the country, including but not limited to increased generation capacity and diversification of energy resources; governance and fiscal effects from substantial government revenues; positive environmental effects through power generation from a renewable resource; and private sector development arising from improved business environment, local linkages and knowledge transfer. By relaxing energy infrastructure constraints in a high-deficit country, the project has the potential to contribute to the Bank's inclusive growth objective. The contribution to green growth is potentially high, as increased use of a renewable energy resource like hydro power will lower the carbon emission intensity for the power generation system.