Nigeria seeks $2 billion China loan to construct power ‘super grid’
The Federal Government is in advanced discussions with the Export-Import Bank of China for a $2 billion loan. The financing is intended to build a new electricity super grid designed to finally resolve Nigeria’s persistent power supply challenges.
Project Aims to Strengthen Transmission
According to Bloomberg, the proposed grid project aims to strengthen power transmission across the eastern and western regions of the country, where the majority of industrial consumers are based.
Adebayo Adelabu, the Minister of Power, disclosed the plan on Monday at an economic summit in Abuja. He said the project is part of a broader effort to decentralise power generation and encourage heavy energy users who abandoned the national grid due to its unreliability to reconnect.
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“It’s part of plans to decentralise power generation in Nigeria and get the heavy commercial users that left the power grid because of its unreliability to return,” Adelabu said.
Bloomberg further reported that the Minister’s team confirmed that negotiations with China’s Exim Bank are progressing, and the financing for the super grid has already secured cabinet approval.
Nigeria’s electricity generation capacity is approximately 13 gigawatts, yet only about a third of that actually reaches consumers via the central grid, which frequently suffers system collapses.
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For comparison, Bloomberg reported that South Africa, despite having only a quarter of Nigeria’s population, has about 70 gigawatts of installed generation capacity.
The nation’s unreliable power supply has compelled many companies to rely on self-generated electricity, which now accounts for nearly half of national consumption. According to Adelabu, the new super grid will improve power flow to industrial zones and encourage manufacturing growth.
Since President Bola Tinubu took office in 2023, the administration has implemented several key economic reforms, including the removal of fuel subsidies, an overhaul of the tax system, and improved security in oil-producing regions, all intended to attract investment.
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The Tinubu administration also approved tariff increases for some urban consumers to improve the financial viability of the power sector.
According to Bloomberg, Adelabu said this policy resulted in a 70 per cent rise in revenue for electricity distribution companies in 2024, with further growth projected to reach ₦2.4 trillion ($1.6 billion) this year.
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