The Federal Government is in advanced talks with China’s Export-Import Bank for a $2 billion loan to build a new electricity super grid designed to tackle Nigeria’s long-standing power supply challenges.
According to Bloomberg, the proposed grid project aims to strengthen power transmission across the eastern and western regions of the country, where most industrial consumers are based.
Minister of Power, Adebayo Adelabu, disclosed the plan at an economic summit in Abuja on Monday, saying the project was part of efforts to decentralise power generation and encourage heavy energy users who left the national grid due to its unreliability to reconnect.
“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.
According to Bloomberg, the minister’s team confirmed that negotiations with China’s Exim Bank were progressing, while the financing for the super grid had already received cabinet approval.
Nigeria’s electricity generation capacity is about 13 gigawatts, but only a third of that reaches consumers through the central grid, which frequently experiences system collapses.
By comparison, Bloomberg reported that South Africa, with a population a quarter of Nigeria’s, has about 70 gigawatts of installed generation capacity.
The unreliable power supply has forced many companies to depend on self-generated electricity, now accounting for nearly half of national consumption.
The new super grid, according to Adelabu, will improve power flow to industrial zones and encourage manufacturing growth.
Since President Bola Tinubu assumed office in 2023, Nigeria has implemented several economic reforms, including the removal of fuel subsidies, tax system overhaul, and improved security in oil-producing regions to attract investment.
Tinubu’s administration also approved tariff increases for some urban consumers to improve the financial viability of the power sector.
According to Bloomberg, Adelabu said the policy led to a 70 per cent rise in revenue for electricity distribution companies in 2024, with further growth projected to reach ₦2.4 trillion ($1.6 billion) this year.
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News Source: Punchng.com
