China has expressed commitment to boosting investment in Nigeria’s energy sector following a high-profile meeting between President Xi Jinping and President Bola Tinubu in Beijing on September 3, 2024.
The discussion marks a significant step in enhancing bilateral cooperation, particularly in energy development, as the two leaders aim to further their strategic partnership.
At the meeting China expressed its readiness to support Nigeria’s energy and mineral resource sectors.
Key takeaways is encouraging Chinese major companies to invest in Nigeria’s energy infrastructure and resource development, reflecting China’s broader strategy to aid Nigeria’s economic diversification and growth.
China also invited Nigeria to participate in its e-commerce and logistics sectors, indicating a willingness to integrate these areas with energy investments. The statement emphasised that the cooperation would help Nigeria leverage its energy resources more effectively, contributing to its economic stability and growth.
President Xi Jinping highlighted the importance of this strategic alignment, noting that strengthening ties between China and Nigeria would inject new energy into China-Africa relations and support progress among Global South countries. The leaders agreed to explore flexible regional financial mechanisms, such as local currency swaps, to facilitate bilateral trade, including energy transactions.
China’s support extends to enhancing Nigeria’s energy technology capabilities. Both countries agreed to collaborate on advancing Nigeria’s energy infrastructure, including nuclear energy, as part of the Belt and Road Initiative (BRI) an initiative that has already been instrumental in building significant infrastructure projects in Nigeria, such as a deep sea port and rail lines, and will now focus on energy-related developments.
During the visit, President Tinubu secured a commitment from Huawei to establish a joint solar photovoltaic (PV) test lab in Nigeria, marking a significant step towards advancing renewable energy technology. Additionally, a Chinese firm pledged to set up an assembly plant for electric tricycles, supporting Nigeria’s transition to renewable energy and technology.
China is Nigeria’s largest bilateral lender, having provided $5 billion in loans by the end of March. This enhanced cooperation is expected to substantially impact Nigeria’s energy sector. The collaboration aims to drive development, improve energy infrastructure, and contribute to Nigeria’s more stable and self-reliant energy landscape, reinforcing the overall strength of China-Nigeria relations.
Commitment In Progress
In a short time under the arrangements a Chinese Company, Mutual Commitment Company (MCC) Limited will begin to roll out electric tricycles in Nigeria as the country accelerates investment in electric vehicles production in line with its energy transition strategy.
A Memorandum of Understanding (MoU) to that effect was facilitated by the Rural Electrification Agency (REA)
At the MoU signing ceremony were the minister of power, Chief Adebayo Adelabu and the Managing Director of REA, Mr Abba Aliyu.
Speaking at the event which took place in Beijing on the eve of the opening ceremony of the African-China Co-operation Summit, Aliyu reiterated the importance of the ceremony as it was capable of delivering on the presidential mandate of building local capacity and creating more job opportunities.
“We will track this and ensure the delivery of the commitment within the tenure of the present administration. We will also track the economic factor that this initiative will drive, the level of GDP contribution, the employment opportunities provided and the socio-economic activities that will crystallise,” he said.
Adelabu, on his part said the MoU will go down as a memorable day for Nigeria.
“I know Nigeria and China have a lot of things in common one of which is the fact that Nigeria and China are both high population countries and with a country with high population, you have so much pressure.
“The first pressure is that of energy access and the second being job creation. So when you take steps to achieve both, it is a thing of joy. I am particularly happy that this is happening during the tenure of President Bola Tinubu, as it is in line with achieving the Renewed Hope Agenda of the administration for the country,” he said.
The minister said President Bola Tinubu has prioritised the power sector as the driver for all other critical sectors of the economy and was giving all the support to ensure the minister delivers.
He noted that energy access and expansion was government’s major priority because nothing can be achieved without strong, stable, functional and reliable electricity sector.
“We have relied so much on centralisation of our power sector for so long that it is not taking us anywhere,” he said, adding that almost 40 per cent of Nigeria’s population lack access to energy with its attendant consequences.
“So moving away from centralisation, we have decided to adopt the distributed power model to ensure that every Nigerian has access to energy. A lot of our population reside in the rural areas, a lot of our institutions-educational and tertiary health institutions are isolated and they are still facing epileptic power supply.
“We have also found out that the adoption of distributed energy model will expand the energy net for our rural dwellers, the rural businesses, our universities and tertiary health institutions,” he added.
According to him, as Nigeria continues to expend energy access, the country also wants to achieve transition to cleaner sources of energy that are sustainable and environment-friendly.
“This is why we have both long-term and medium -term target to achieving net zero carbon emission by year 2060 and also to enable us achieve 30 per cent of our energy generation coming from renewable energy by year 2030. So renewable energy is currently a major focus for us in the power sector,” he stressed.
He said the two MoUs would achieve the vision for the renewable energy sub segment of the power sector with focus on five items— development of local capacity , noting that along the value chain of the renewable energy sector, a lot of human and material resources that are required are still significantly dependent on import.
“Also, we will be able to produce jobs for our large youthful population that is growing everyday. Our polytechnics , technical colleges and universities are turning up graduates on a yearly basis without assurance of job placement. This will go a long way to make it happen, at the same time, we will be able to achieve our energy access expansion,” he said.
Vice chairman of MCC, Yan Zhezhu who spoke through an interpreter said, “We are not new to Nigeria having started in Oyo State a long time ago. Presently, we have ongoing projects in Maiduguri and Kaduna and we appreciate the cooperation we have so far received. Our projects have seen us working with States and the Federal Government in Nigeria and we are committed to do more.”
The U.S Intervention
In a similar situation a critical dialogue to promote energy development partnership between the United States and Nigeria has been initiated by the Bureau of Energy Resources (ENR).
The ENR assistant secretary Geoffrey R. Pyatt, will lead the inaugural U.S.-Nigeria Strategic Energy Dialogue in Washington, DC hosting a senior delegation from the Nigerian government led by the minister of state petroleum resources Ekperikpe Ekpo.
Over the course of the dialogue, U.S. and Nigerian officials will discuss opportunities to expand cooperation on improving energy security and access, decarbonisation of the oil and gas sector, and accelerating the energy transition.
They will also engage on strategies to enhance Nigeria’s power sector, including electricity production and distribution.
The dialogue will advance bilateral cooperation on key State Department energy initiatives such as the Foundational Infrastructure for Responsible Use of Small Modular Reactor Technology (FIRST), Women in Energy, and the Clean Energy Demand Initiative (CEDI).
Additionally, participants will engage on promoting progress on U.S. government initiatives like Power Africa, which aims to increase electricity access and promote energy, investment in sub-Saharan Africa, USAID’s Gas Flare Program, and the Department of Energy’s Net Zero World.
Understanding the fundamental role the private sector plays in meeting bilateral energy and climate goals, the dialogue aims to foster enhanced collaboration between the U.S. and Nigerian private sectors, creating new opportunities for American and Nigerian businesses and contributing to the growth and sustainability of the energy sectors in both countries, with the goal of delivering shared prosperity to the Nigerian and American people.
The Dialogue is a key outcome of a series of successful bilateral engagements, including Secretary of State Antony’s Blinken’s trip to Nigeria in January 2024, Deputy Secretary Kurt Campbell’s meeting with Nigerian Foreign Minister Yusuf Tuggar during the sixth U.S.-Nigeria Binational Commission in April, and Assistant Secretary Pyatt’s meeting with Nigerian President Bola Ahmed Tinubu in 2023, where this dialogue was agreed.
In addition to Assistant Secretary Pyatt, the United States’ delegation will include senior officials from the Bureau of African Affairs, the Office of the Senior Advisor to the President for International Climate Policy, USAID’s Power Africa, the Department of Energy, the Development Finance Corporation (DFC), the U.S. Trade and Development Agency (USTDA), and the Export-Import Bank (EXIM).
The dialogue will also include a public-private discussion hosted by the U.S. Chamber of Commerce to deepen private sector partnerships and investments between the United States and Nigeria.
Accelerating Universal Energy Access
All of these initiatives aims to help Nigeria achieve universal energy access by 2060, targeting 30GW by 2030 with 30 per cent from renewable sources via partnerships. This move is likely to ensure that every citizen has access to reliable electricity.
The federal government has announced its commitment to achieve universal energy access by the year 2060.
Minister of Power, Adebayo Adelabu, revealed this goal while addressing Chinese investors at the 1st China-Nigeria 2024 Economic Cooperation and Trade Conference in Beijing, China.
This short-term goal falls under Nigeria’s “Vision 30:30:30,” which plans to generate 30 per cent of that energy from renewable sources. The long-term goal is to achieve universal energy access by 2060. This ensures that every citizen has access to reliable electricity.
Adelabu stressed the importance of partnerships between Nigeria and Chinese investors.
He said Chinese investments could help Nigeria switch to cleaner, sustainable energy.?
This collaboration would improve Nigeria’s energy security. It would also support the country’s growing economy.
“This is a partnership that spans decades with notable achievements across the power sector value chain “ said Adelabu. This he outlines as being “in line with Nigeria’s goal of energy sustainability and economic development.”
To achieve these ambitious goals, Nigeria has implemented several strategies. These strategies would help overcome challenges in the electricity supply industry. The country is taking a multi-pronged approach to this. By doing so, it ensures sustainable progress across the energy sector.
Adelabu while highlighting the new processes said the Government would endeavour to reduce bureaucratic delays by streamlining legislative and policy processes to cut down on unnecessary red tape.
This aids transparency and efficient governance and encourages more investments and supports faster project execution across the energy sector.
The second step is to encourage Public and Private Funding, using both public and private funds to de-risk project investments.
By making investments less risky, Nigeria hopes to attract larger financial commitments. Equally this will help speed up the rollout of energy projects.
Also he said with the adoption of technology and innovation, the country is leveraging technology to help identify optimal investment opportunities. This makes it easier for investors to pinpoint projects with high potential.
Another key consideration is infrastructure development which has prompted Nigeria to launched a national program to develop its energy infrastructure.
The goal is to build a strong, reliable grid network that can withstand future challenges. in addition, strategic partnerships will provide opportunities to collaborate with investment communities and development partners. These partnerships would allow Nigeria to access global expertise, share resources, and co-invest in energy projects.
The minister expressed optimism about the ongoing Nigeria-China Economic Forum, saying that it presents a valuable opportunity for both countries.
Nigeria seeks to strengthen these existing collaborations and explore new ways to work together and by doing so, both nations can secure shared benefits.
Adelabu joined President Bola Ahmed Tinubu at the Africa-China Cooperation Summit in Beijing where they discussed economic and energy issues with Chinese officials. The summit helps African countries like Nigeria work with China on important development matters.
Many rural and underserved areas in Nigeria still lack reliable electricity and without energy, these regions face poverty, poor education, and weak healthcare systems. So, achieving universal energy access by 2060 is vital for Nigeria’s development. Expanding access to energy will strengthen Nigeria’s economy and improve millions of lives.
Adelabu’s plan aims to upgrade the energy grid while using cleaner sources.
Foreign investors, especially from China, will gain from Nigeria’s focus on energy development. The country’s growing demand for energy, combined with government incentives, creates a favourable environment for foreign direct investment.
Adelabu emphasised that investing in clean energy and infrastructure offers high returns.
Chinese companies have already played a significant role in Nigeria’s power sector as they will help build important infrastructure and fund energy projects.
