THE Federal Government is in advanced negotiations with China’s Export-Import Bank for a $2 billion loan to develop a new electricity super grid aimed at resolving Nigeria’s persistent power supply challenges.
According to Bloomberg, the proposed project is designed to strengthen electricity transmission across the eastern and western regions of the country, which host the bulk of Nigeria’s industrial consumers.
The Minister of Power, Adebayo Adelabu, announced the plan yesterday during an economic summit in Abuja.
He explained that the initiative is part of the government’s strategy to decentralise power generation and attract back major industrial users who left the national grid due to unreliable supply.
“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 progressing well, and the financing arrangement for the project has already received cabinet approval.
Currently, Nigeria’s total electricity generation capacity stands at around 13 gigawatts, but only about a third of this reaches end users through the national grid, which often suffers system collapses.
In contrast, South Africa, with a population roughly one-quarter the size of Nigeria’s, has an installed generation capacity of about 70 gigawatts.
The unreliable power supply has forced many Nigerian companies to rely on self-generated electricity, which now accounts for nearly half of total national consumption.
Adelabu said the new super grid would improve power flow to industrial zones and boost manufacturing growth.
Since assuming office in 2023, President Bola Tinubu’s administration has embarked on several economic reforms, including fuel subsidy removal, tax restructuring, and enhanced security in oil-producing areas to attract foreign investment.
The government has also approved tariff adjustments for urban electricity consumers to improve the sector’s financial sustainability.
According to Adelabu, this move resulted in a 70 per cent increase in revenue for electricity distribution companies in 2024, with collections projected to reach ₦2.4 trillion ($1.6 billion) this year.