FG, China in for $2 Billion Loan to Build Power Grid

News Update

Nigeria is in talks with the Export-Import Bank of China for a $2 billion loan to fund a new super grid intended to address the nation’s persistent power shortages.

The plan, confirmed yesterday in Abuja by Minister of Power Adebayo Adelabu, is designed to boost the country’s electricity supply and reduce power outages.

“It’s part of plans to decentralize power generation in Nigeria” and get the heavy commercial users that left the power grid because of its unreliability to return, he said.

The loan is designated for the construction of a super grid. The new power line is intended to decentralize electricity generation and increase supply to industrial zones in both eastern and western Nigeria.

The financing for the project has already been approved by Nigeria’s cabinet.

The loan is part of a broader strategy by President Bola Tinubu’s administration to transform the power sector. Other recent efforts include: securing $1.1 billion from the African Development Bank (AfDB) for electricity access; obtaining $70 million from the International Finance Corporation (IFC) for mini-grid projects; sealing a $328.8 million deal with a Chinese firm, CMEC, to improve electricity transmission infrastructure.

In October 2023, the Federal Government had signed a $2 billion Memorandum of Understanding (MoU) with three Chinese firms to invest in the power generation and digital economy sectors.

There have also been other, unrelated agreements for maritime investment and other infrastructure projects that have been mistaken for the recent power loan.

In late 2024, China and Nigeria renewed a separate $2 billion currency-swap arrangement to boost trade and investment between the two nations.