Nigeria Seeks $2 Billion China Loan to Fund New Electricity Super Grid
The Nigerian government is in advanced negotiations with China’s Export-Import Bank for a $2 billion loan to build a new electricity super grid aimed at tackling the country’s persistent power supply challenges. Bloomberg reports that the proposed super grid will boost power transmission across the eastern and western regions, home to most of Nigeria’s industrial consumers. At an economic summit in Abuja on Monday, Minister of Power Adebayo Adelabu said the project is part of efforts to decentralize power generation and encourage large commercial users, who previously disconnected from the unreliable national grid, to return. “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. Negotiations with China’s Exim Bank are reportedly progressing, and cabinet approval for financing the project has already been granted, according to Bloomberg. Currently, Nigeria generates about 13 gigawatts of electricity, but only a third reaches consumers due to frequent grid collapses. By comparison, South Africa, with a quarter of Nigeria’s population, has an installed capacity of roughly 70 gigawatts. The unreliable power supply has pushed many businesses to rely on self-generated electricity, which now makes up nearly half of national consumption. The super grid is expected to improve power delivery to industrial zones, stimulate manufacturing, and support economic growth. Since taking office in 2023, President Bola Tinubu’s administration has implemented economic reforms, including removing fuel subsidies, overhauling the tax system, and improving security in oil-producing regions to attract investment. The government also approved higher tariffs for some urban electricity consumers to strengthen the financial viability of the power sector. According to Bloomberg, these measures helped electricity distribution companies raise revenue by 70 per cent in 2024, with further growth projected to reach ₦2.4 trillion ($1.6 billion) in 2025.
