Nigeria is negotiating for a $ 2 billion loan with China's export and import bank to create a new super grid to reduce power shortage, which has reduced economic growth for decades.
The new power line will serve the eastern and western regions of the country – where most of the industrial consumers are located, Nigeria's Power Minister Adebayo Edelabu said at an economic summit in Abuja on Monday. He said, “It is part of the plan to decentralize power generation in Nigeria” and get heavy commercial users who left the power grid due to their unreliableness, said.
The talks with China Eximbank are moving forward, the minister's team said in response to Bloomberg's questions.
Firms working in Africa's most populous nation face constant disruption in electricity-supply. While the power generation capacity of the country is about 13 GW, the central grid can distribute only one -third of the country's more than 200 million people. Nevertheless, the grid often fails. South Africa, with a population, which is a quarter, has about 70 gigawatts of installed generation capacity.
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The situation has forced several firms to get out of the national pool with self-borne power accounting for about half of electricity consumed in the nation. The new super grid will help ensure that the more generated power goes to the industrial areas of the country.
Financing for the new super grid has already been approved by the cabinet, said Edelabu.
Nigeria has introduced several significant reforms as President said that in 2023, the President came to power to promote economic growth. These include ending fuel subsidy that increases raw production by drought, overhaling government finance for decades and improving security in its main producing sector.
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Tinubu has also allowed power firms to increase tariffs for some urban consumers to improve the financial viability of the region. Adelabu said that the move made a jump of revenue for power firms in 2024 and this year an increase of 2.4% to 2.4 Tillion Naira ($ 1.6 billion) this year.
