Nigeria is in talks with the Export-Import Bank of China for a $2 billion loan to fund a new super grid to address the nation’s persistent power shortages.
This was disclosed by the Minister of Power, Mr Adebayo Adelabu, during the Nigerian Economic Summit in Abuja on Monday, noting that the loan will help to boost the country’s electricity supply and reduce power outages.
“It’s part of plans to decentralize power generation in Nigeria”, he said, adding that it will help attract the heavy commercial users that left the power grid because of its unreliability to return.
The new transmission infrastructure will link the eastern and western regions of the country, where most of Nigeria’s industrial consumers are located.
Mr Adelabu also said the proposed super grid would improve transmission efficiency and ensure more power reaches industrial zones.
He added that the Federal Executive Council (FEC) has already approved financing for the project.
Mr Adelabu also revealed that recent tariff adjustments for urban consumers have improved industry revenues by 70 per cent in 2024 and are projected to rise further by 41 per cent to N2.4 trillion this year.
The loan is part of recent borrowings by Nigeria to tackle challenges in its struggling power sector. Other recent financing includes the securing of $1.1 billion from the African Development Bank (AfDB) for electricity access; obtaining $70 million from the International Finance Corporation (IFC) for mini-grid projects; sealing a $328.8 million deal with a Chinese firm, CMEC, to improve electricity transmission infrastructure.
In October 2023, the federal government had signed a $2 billion Memorandum of Understanding (MoU) with three Chinese firms to invest in the power generation and digital economy sectors.