Nigeria Seeks $2 Billion Chinese Loan to Modernize Power Grid and Boost Electricity Supply
Story: Written by Okafor Joseph October 7,2025
Nigeria is negotiating a $2 billion loan from China’s Export-Import Bank (China Exim Bank) to finance the construction of a new super grid aimed at addressing chronic power shortages and improving electricity distribution across the country.
The new transmission network, which will connect Nigeria’s eastern and western industrial hubs, is part of a broader effort by the Federal Government to decentralize power generation and expand reliable access to electricity for homes and businesses.
Speaking at the Nigeria Economic Summit in Abuja on Monday, Minister of Power Adebayo Adelabu said the project will help industrial consumers—many of whom have abandoned the national grid due to its instability—return to the public power system.
“This project is designed to decentralize power generation in Nigeria and restore confidence in the national grid,” Adelabu explained.
China Exim Bank in Advanced Talks with Nigeria
According to the minister’s office, negotiations with China Exim Bank are in advanced stages, and the Federal Executive Council has already granted approval for the financing arrangement. The project is expected to enhance grid reliability, minimize system collapses, and reduce dependence on expensive self-generated power.
Nigeria’s existing grid can transmit only about 4,000 to 5,000 megawatts—roughly a third of the nation’s 13-gigawatt generation capacity—to its over 200 million citizens. In comparison, South Africa, with one-fourth of Nigeria’s population, boasts nearly 70 gigawatts of installed capacity.
Economic Impact and Reforms in the Power Sector
Frequent blackouts have long crippled industrial output and deterred investment in Africa’s largest economy. The super grid project, once completed, is expected to channel more generated electricity to key industrial zones, significantly reducing energy costs for manufacturers.
Since President Bola Tinubu assumed office in 2023, Nigeria has embarked on comprehensive economic reforms to revive growth. These include removing fuel subsidies, reforming tax laws, increasing crude oil output, and improving energy pricing to ensure the financial sustainability of electricity distribution companies.
Adelabu revealed that recent tariff adjustments for urban consumers led to a 70% revenue increase for power firms in 2024, with projected growth of 41% to ₦2.4 trillion ($1.6 billion) in 2025.
The minister said the government remains committed to attracting foreign investment and ensuring that Nigeria’s power sector supports sustainable industrialization and economic expansion.
