Power: Nigeria seeks $2 billion China loan for new super grid

Nigeria is in discussions with China’s Export-Import Bank for a $2 billion loan to finance a new “super grid” aimed at easing the country’s chronic power shortages and boosting industrial growth.

According to Bloomberg, the Minister of Power, Adebayo Adelabu, disclosed this during an economic summit in Abuja on Monday, noting that the new transmission infrastructure will link the eastern and western regions of the country, where most of Nigeria’s industrial consumers are located.

The Minister noted that the project is part of government efforts to decentralize power generation and encourage large-scale industrial users who left the national grid due to its unreliability to reconnect.

“It’s part of plans to decentralize power generation in Nigeria and get the heavy commercial users that left the power grid because of its unreliability to return,” he said.

A fragile power system 

Nigeria’s electricity supply challenges remain a key constraint on economic productivity. Despite having an installed generation capacity of about 13 gigawatts, the country’s central grid delivers only around a third of that to its more than 200 million people, and frequent grid collapses worsen the situation.

By comparison, South Africa, with roughly a quarter of Nigeria’s population, has an installed generation capacity of about 70 gigawatts.

• The unreliable power supply has driven many firms to rely on self-generation, which now accounts for nearly half of the electricity consumed nationwide.
• Adelabu said the proposed super grid would improve transmission efficiency and ensure more power reaches industrial zones.
• He added that the Federal Executive Council has already approved financing for the project.

The plan aligns with President Bola Tinubu’s broader economic reform agenda, which includes scrapping fuel subsidies, overhauling tax laws, improving oil production through better security in the Niger Delta, and strengthening the power sector’s financial sustainability.

Adelabu also revealed that recent tariff adjustments for urban consumers have improved industry revenues up 70% in 2024 and are projected to rise further by 41% to N2.4 trillion ($1.6 billion) this year. (Nairametrics)