The Nigerian government is reportedly in discussions with China’s Export-Import Bank for a $2 billion loan to construct a new “super grid” aimed at resolving the country’s persistent electricity challenges.
Minister of Power, Adebayo Adelabu, said on Monday that the new transmission line would serve both the eastern and western regions of Nigeria, where many factories and large businesses are located.
“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 at an economic summit in Abuja.
According to Bloomberg, Adelabu confirmed that the loan had already been approved by the Federal Executive Council, while negotiations with China’s Eximbank were “advancing.”
Nigeria generates about 13,000 megawatts of electricity, but the national grid can only transmit roughly one-third of that capacity. Even so, the grid suffers frequent breakdowns, leaving millions of Nigerians and businesses with little or no power supply.
By comparison, South Africa—whose population is about one-quarter of Nigeria’s—has more than 70,000 megawatts of installed power capacity.
Because of Nigeria’s unreliable power system, many companies now produce their own electricity. Experts estimate that nearly half of the country’s electricity consumption comes from self-generated power.
The proposed super grid is expected to improve power distribution to industrial areas and reduce dependence on private generators.
The initiative forms part of President Bola Tinubu’s broader economic reform agenda. Since assuming office in 2023, his administration has scrapped fuel subsidies, reformed tax laws, increased oil production, and introduced changes in the power sector.
As part of those reforms, electricity companies were permitted to raise tariffs for consumers with stable supply.
Adelabu said this had boosted revenue for power firms by 70 per cent in 2024, with earnings projected to grow a further 41 per cent this year to ₦2.4 trillion (about $1.6 billion).
