The Federal Government is in advanced negotiations with China’s Export-Import Bank for a $2 billion loan to finance the construction of a new electricity super grid aimed at addressing Nigeria’s persistent power supply challenges.
According to a Bloomberg report, the proposed project seeks to enhance power transmission across the eastern and western regions of the country, which host a large concentration of industrial and commercial consumers.
Minister of Power, Adebayo Adelabu, disclosed the plan at an economic summit in Abuja on Monday, noting that the initiative forms part of the government’s broader efforts to decentralise power generation and restore confidence among industrial users who have exited the national grid due to its unreliability.
“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.
He added that discussions with China’s Exim Bank were progressing well and that the financing for the super grid had already received cabinet approval.
Nigeria currently has an installed generation capacity of about 13 gigawatts, but only around one-third of this reaches end-users due to transmission bottlenecks and frequent system collapses. In comparison, South Africa, with a population roughly a quarter of Nigeria’s, boasts an installed capacity of about 70 gigawatts.
The unreliable power supply has forced many industries and businesses to rely on self-generated electricity, which now accounts for nearly half of the country’s total energy consumption. The new super grid is expected to improve transmission efficiency, enhance supply to industrial hubs, and support the country’s manufacturing growth.
Since President Bola Tinubu took office in 2023, the government has embarked on several economic reforms, including the removal of fuel subsidies, tax system restructuring, and improved security in oil-producing regions to attract investment.
To strengthen the electricity market’s financial base, the administration also approved tariff adjustments for select urban consumers, a move Adelabu said led to a 70 percent increase in revenue for power distribution companies in 2024. He projected that total revenue in the sector could rise to about ₦2.4 trillion ($1.6 billion) in 2025.
