Nigeria Eyes $2 Billion China Loan for ‘Super Grid’ to Tackle Power Crisis

ABUJA The Federal Government of Nigeria is currently negotiating a $2 billion loan with the Export-Import Bank of China to finance a new national “super grid,” in a bold move to overhaul the country’s struggling power transmission system and end decades of electricity blackouts.

Speaking at the Nigeria Economic Summit in Abuja on Monday, Minister of Power Adebayo Adelabu said the proposed transmission infrastructure would strengthen power delivery to Nigeria’s industrial and commercial hubs, particularly in the eastern and western regions.

“This project is designed to decentralise power generation and encourage major commercial consumers who have abandoned the national grid due to its unreliability to return,” Adelabu stated.

He confirmed that the Federal Executive Council has already approved the borrowing plan, and discussions with China’s Eximbank are “progressing.”

Nigeria currently generates about 13,000 megawatts of electricity, yet the ageing national grid is capable of transmitting only around 4,500 megawatts. Frequent system failures and grid collapses have left millions of homes and businesses in the dark, pushing many to rely on costly self-generated power.

By contrast, South Africa with a population roughly a quarter of Nigeria’s boasts an installed capacity of over 70,000 megawatts.

The proposed super grid is a key component of President Bola Tinubu’s broader economic reform agenda, which includes liberalising the power sector, scrapping fuel subsidies, reforming taxes, and boosting oil output.

Since assuming office in 2023, the Tinubu administration has also approved electricity tariff increases for customers who receive consistent supply. According to Adelabu, this policy has resulted in a 70% revenue jump for electricity distribution companies in 2024, with earnings projected to rise to ₦2.4 trillion (approximately $1.6 billion) in 2025.

Experts estimate that nearly half of Nigeria’s electricity consumption now comes from self-generated sources mainly private diesel and gas generators due to the grid’s unreliability. The new super grid aims to reverse this trend by improving efficiency and reducing transmission losses.

If secured, the $2 billion Chinese loan would mark one of the largest power infrastructure investments in Nigeria in recent years, with the potential to reshape the country’s energy landscape.