To address Nigeria’s long-standing power supply issues, the Federal Government is in advanced negotiations with China’s Export-Import Bank for a $2 billion loan to construct a new electrical super grid.
The proposed grid project, according to Bloomberg, intends to improve electricity transmission throughout the country’s eastern and western regions, which are home to the majority of industrial consumers.
“The project is part of efforts to decentralise power generation and encourage heavy energy users who left the national grid due to its unreliability to reconnect,” said Adebayo Adelabu, minister of power, during an economic summit in Abuja on Monday.
According to Adelabu, it is a component of plans to decentralise electricity generation in Nigeria and entice major business customers who abandoned the grid due to its unreliability to rejoin.
The minister’s team acknowledged that talks with China’s Exim Bank were moving forward, and the cabinet had previously approved the super grid’s financing, according to Bloomberg.
Only one-third of Nigeria’s roughly 13 gigawatts of energy producing capacity is delivered to consumers via the central grid, which frequently experiences system failures.
In contrast, according to Bloomberg, South Africa has roughly 70 gigawatts of installed generation capacity and a population that is a fourth of Nigeria’s.
Many businesses are now obliged to rely on self-generated electricity, which currently makes up almost half of the nation’s consumption, due to the unstable power supply.
Adelabu claims that the new super grid will boost industry growth and enhance electricity flow to industrial zones.
Nigeria has carried out a number of economic reforms since President Bola Tinubu took office in 2023, including as eliminating fuel subsidies, revamping the tax code, and enhancing security in oil-producing areas to draw in foreign investment.
In order to increase the electricity sector’s financial sustainability, Tinubu’s administration also authorised tariff rises for a few urban consumers.
Adelabu told Bloomberg that the program increased electricity distribution businesses’ revenue by 70% in 2024 and that this year’s growth is expected to reach ₦2.4 trillion ($1.6 billion).
