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Mapping Nigeria-China clean energy and industrialization opportunities

Source: author’s concept.

Key Findings

Persistent electricity access and infrastructure constraints

Nigeria continues to face significant electricity access and reliability challenges. Although installed generation capacity is estimated at approximately 13 GW, transmission constraints limit peak generation to about 5.7 GW, while national electricity demand is estimated to be around 20 GW. As a result, a large share of the population remains without access to electricity and many connected users experience unreliable supply. These conditions have contributed to the increasing deployment of decentralized electricity solutions such as solar home systems and mini-grids.

Policy frameworks guiding the energy transition

Nigeria has adopted several policy frameworks to guide the transition of its energy sector. The Energy Transition Plan, the Electricity Act of 2023, and the country’s updated Nationally Determined Contributions outline targets that include universal electricity access by 2030, increasing the share of renewable energy in the power mix, and achieving net-zero emissions by 2060. Within these frameworks, renewable energy expansion is expected to occur alongside the continued use of natural gas as a transition fuel.

China’s role in Nigeria’s energy infrastructure development

China has been involved in several major energy infrastructure projects in Nigeria over the past two decades. These include hydropower projects such as the Zungeru and Mambilla dams, transmission infrastructure upgrades, and gas pipeline projects such as the Ajaokuta–Kaduna–Kano pipeline. Many of these projects have been financed through loans from Chinese policy banks and implemented by Chinese engineering and construction firms.

Evolution of China–Nigeria energy cooperation

More recent cooperation between Nigeria and China reflects a broader shift toward renewable energy technologies and new forms of collaboration. Partnerships now extend beyond large-scale infrastructure to include solar technologies, distributed energy systems, and technology partnerships related to renewable energy deployment. These developments correspond with broader changes in China’s overseas investment approach and Nigeria’s expanding focus on clean energy technologies.

Chinese technologies in Nigeria’s renewable energy supply chains

Chinese manufacturers play a significant role in supplying equipment used in Nigeria’s renewable energy sector. Solar panels, inverters, and battery systems used in off-grid and commercial solar installations are widely sourced from Chinese companies. These technologies are used across solar home systems, mini-grid deployments, and commercial solar installations.

International financing landscape for Nigeria’s energy transition

Nigeria’s clean energy transition involves engagement with a range of international partners. Multilateral development banks and Western development partners often provide concessional finance, guarantees, and technical support for energy projects. Chinese firms frequently participate through engineering, procurement, and construction roles as well as through equipment supply and infrastructure development. Project financing arrangements often combine different sources of finance and technical participation.

Institutional capacity and coordination considerations

Institutional coordination plays an important role in Nigeria’s engagement with international energy partners. Differences in institutional experience and familiarity with foreign investment structures can affect project negotiation, implementation, and oversight. Strengthening institutional capacity can support more effective coordination of energy partnerships and infrastructure projects.

Opportunities portfolio

Strengthening RMB-naira mechanisms

Nigeria should deepen the use of the RMB–NGN currency swap and formalize local settlement mechanisms to strengthen trade and investment ties with China. In December 2024, Nigeria renewed a Chinese yuan (CNY) 15 billion (= USD2 billion) swap agreement with the People’s Bank of China to “deepen trade ties and ease FX pressures.” To translate this into real economic impact, Nigeria could establish RMB–naira receivables desks at major importers and distributors, while the Central Bank of Nigeria (CBN) and the People’s Bank of China (PBoC) issue joint settlement guidance for cross-border transactions.

Such measures would make it easier for Nigerian importers to settle directly in local currencies, reducing dollar dependency and volatility. Additionally, commodity-backed credit lines, similar to oil-for-loan models, could be adapted to finance gas, lithium or agricultural exports that support industrial production and clean-energy value chains. This would not only expand access to liquidity for Nigerian firms but also provide China with a reliable pipeline of resource inputs for its growing green-technology sector. Overall, enhanced RMB–naira cooperation provides a financial foundation for green industrialization, anchoring predictable trade flows, easing foreign-exchange constraints and creating new channels for Chinese development and commercial banks to support Nigeria’s clean-energy infrastructure.

Trade and Industrialization

Parallel to financial reforms, Nigeria should leverage China’s new tariff-free African trade policy and regional AfCFTA rules to expand industrial production and export diversification. Under China’s current framework, countries such as Kenya, South Africa and Nigeria already benefit from duty-free access for selected products, opening China’s 1.4 billion-person market to Nigerian exports like palm oil, solid minerals and agro-processed goods. Indeed, it was noted that China’s new “tariff-free” African policy could let Nigeria export a wider range of goods (beyond oil) without import duties.

Yet the true opportunity lies in transforming raw exports into value-added, low-carbon products. By attracting Chinese investment in clean manufacturing technologies, for instance, solar-powered agro-processing, battery assembly, low-carbon cement production and green industrial parks, Nigeria can move up the value chain while aligning industrial growth with its ETP 2060. This transformation presents a win-win pathway:

• For Nigeria, it means increased jobs, export revenues, and technology transfer through clean-energy-enabled industries.
• For China, it offers expanded market access for its clean-tech manufacturers, long-term industrial cooperation and greater participation in Africa’s green transition.

Within the AfCFTA framework, Nigeria could also scale up production of higher-value goods such as processed cables, battery components and electric-vehicle parts for intra-African export. This dual strategy would help Nigeria achieve industrial scale while reinforcing China’s role as a partner in building green supply chains across Africa.

Distributed and utility-scale power infrastructure

There is a need to scale up proven “small & beautiful” projects while preparing for GW-scale rollout, and it is also necessary to expand the catchment of peri-urban solar mini-grids and solar-home systems (SHS) with strong community contracts and anchor customers. Nigeria’s ETP envisions approximately 8.9 million mini-grid connections (104.8k mini-grids) and 5 million SHS by 2030.Chinese firms can deploy Direct Current-coupled (DC-coupled) solar-plus-storage microgrids in clusters of villages, and negotiate commercial-offtake (C&I) power purchase agreements with creditworthy local factories or Fast-Moving Consumer Goods (FMCG)/agro-processing plants. Utility-scale projects should also grow: Nigeria aims for about 200 GW of solar by midcentury, and Chinese EPCs could partner on multi-megawatt solar parks or gas/solar hybrids, given China’s strong gas-to-power and solar track record. In fact, the Federal Government has just signed a USD328.8-million contract with China’s CMEC to upgrade 330kV/132kV lines (544 km, 7,140 MW capacity), demonstrating China’s role in major transmission work. Importantly, these infrastructure plans should tie into the West Africa Power Pool (WAPP). WAPP is an ECOWAS initiative to integrate electricity markets (currently linking 13 of 14 member states) so that “areas of low generation” receive power from “areas of high supply,” promoting economies of scale. By aligning the new generation and grids with WAPP, Nigeria can export surplus power regionally.

Local assembly and manufacturing

Here, the need is to build out on-shore renewable-energy industries using Chinese capital and know-how.

Solar modules and inverters: encourage Chinese manufacturers to localize assembly (and eventually cell production). Recent deals show this is feasible: Redsolar (a China-Nigeria JV) signed for a 600 MW PV module factory in Kano State, and Oando Clean Energy has launched a 1.2 GW solar module assembly project (Africa’s first with a recycling line for old panels). Supporting such projects with land, incentives, and joint-venture financing will help build a solar supply base. Investment should also target after-sales services and quality-assurance hubs to address Nigeria’s warranty gap for off-grid kits.

Batteries and EVs: foster Chinese-Nigerian joint ventures to assemble battery packs (initially using imported cells) and establish recycling plants. China’s BYD, CATL and other battery leaders could share gigafactory and recycling expertise. At the same time, expand e-mobility assembly: Nigeria has already signed MoUs with Chinese partners to build electric tricycle (“e-trike”) assembly lines. Notably, top officials have urged China to help develop “full-cycle” EV manufacturing in Nigeria (from battery to vehicle). Chinese industry is responding. A recent announcement confirmed plans to build an EV plant in Nigeria, linking Nigerian lithium to EV battery production. Support for these ventures should include technical training, factory floor financing and integration with grid projects (e.g. solar-charging stations for vehicles).

Green hydrogen and fuels: use Nigeria’s abundant solar, wind and natural gas to produce green hydrogen and derivatives. Chinese electrolyzer firms can lead gigascale projects. For example, China’s LONGi (traditionally a PV maker) agreed a EUR7.6 billion preliminary deal to build a giant green-hydrogen-to-methanol complex in Nigeria (capable of 1.2 million tonnes/yr of green methanol). Similar projects could target green ammonia (for fertilizer or export) or compressed hydrogen. Nigeria should offer joint-venture land/loans for these ventures, potentially co-locating solar parks with electrolysis. Linking hydrogen to China’s supply chains (e.g. as fertilizer) would deepen clean-tech ties.

Critical minerals value chain: Nigeria should leverage its new policy barring raw ore exports by attracting Chinese investment in domestic refining and processing. Already, Chinese firms are deploying large lithium plants. A USD600-million lithium processing plant (Kaduna/Niger border) and a USD200-million refinery near Abuja are being commissioned this year with about 80% Chinese funding. Under Nigeria’s “local value-add” mining reforms, exporters must show plans for in-country refining. Sustained Chinese engagement here can turn Nigeria from a raw-miner exporter into a midstream supplier of battery-grade inputs (e.g. lithium salts, nickel cathodes). Similar opportunities exist in cobalt, manganese and other minerals critical for batteries and solar manufacturing.

Climate diplomacy and finance

Nigeria can build a transparent country platform blending Chinese and global climate finance. For instance, Nigeria could expand its new Climate Investment Platform (NCIP) into a multi-stakeholder “Green Industrial Development Platform.” The NCIP (launched in 2025) is designed to mobilize USD500 million by having the Nigeria Sovereign Investment Authority (NSIA) partner with the Green Climate Fund and local stakeholders. By co-creating this platform, Nigeria can string together Chinese concessional credit lines (e.g. for grid or renewable projects) with GCF grants, World Bank/IDA loans and domestic capital. As one GCF official noted, the goal is to “co-create a country platform that aligns with Nigeria’s climate strategy.” In practice, the Platform could match, say, a China-backed loan for a solar grid with an IDA grant for resilience training or a GCF grant for battery storage. Such integration ensures investments support Nigeria’s broader industrial policy (not just short-term sales). Nigeria should also pursue trilateral arrangements (China-Nigeria-multilateral coalitions) in forums like FOCAC and AfCFTA. For example, coordinated African Union’s New Partnership for Africa’s Development (AU/NEPAD) initiatives on critical minerals and renewable tech-transfer (funded by mixed Chinese and Western sources) would formalize Africa-wide cooperation. Overall, by using its NCIP/NCSP frameworks, Nigeria can pool Chinese climate finance with Western climate funds and domestic investment in a transparent way, positioning the country as a hub for Sino–Western climate partnership.

In summary, Nigeria can leverage China‑Africa trade and investment ties across multiple fronts. Clear examples and references include China’s tariff‑waiver policy for Nigeria, the RMB-naira swap mechanism, large Chinese-backed power projects and recent Chinese‑Nigerian deals in solar, EVs and lithium processing. By knitting these opportunities into Nigeria’s own plans (ETP, AfCFTA, NCIP) and regional initiatives (WAPP, AU/NEPAD), the country can maximize jobs, industrial growth and climate gains from its China partnership.

About the Authors

Najim Animashaun

Najim Animashaun is a non-resident fellow at the Africa Policy Research Institute (APRI), focusing on the political economy of energy. With over 30 years of experience as a legal and regulatory advisor, he has supported governments, development partners, and private sector actors in shaping energy policies across Africa.

Olumide Onitekun

Olumide Onitekun is APRI’s Research & Policy Officer for Climate Change, advancing Nigeria’s energy transition, methane mitigation in oil/gas, and integrating climate actions into national development plans.

Chibuikem Agbaegbu

Chibuikem Agbaegbu is a Climate & Energy Specialist with 12+ years in Sub-Saharan Africa. Expert in low-carbon electrification, energy nexus, climate transition & circular economy. Led donor/DFI projects with FCDO, USAID, EU, UNDP, GEF & more.

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China’s evolving role in Nigeria’s clean energy landscape is examined, with the transition treated “not simply as a technical move from fossil fuels to renewables, but as a strategic development question shaped by infrastructure deficits, climate commitments, industrial ambitions, and the country’s positioning among competing global partners.” The shift from large-scale, policy-bank-backed infrastructure projects (Zungeru and Mambilla hydropower, the Ajaokuta-Kaduna-Kano gas pipeline) under “BRI 1.0” toward a “BRI 2.0” approach is evident: “smaller, more commercially oriented and locally embedded projects” including distributed renewables, supplier finance, local assembly, and joint ventures.

Chinese clean-tech exports to Nigeria grew from about $193 million in 2018 to a peak of $830 million in 2024, covering solar PV, batteries, grid equipment, and electric vehicles. Five strategic opportunity clusters are identified: deepening RMB-naira financial mechanisms, leveraging China’s tariff-free policy and AfCFTA for industrialization, scaling mini-grids and utility-scale power infrastructure, promoting local manufacturing and mineral processing (including lithium refining), and creating a transparent climate investment platform blending Chinese and multilateral finance. While opportunities in infrastructure delivery and flexible financing exist, asymmetries in bargaining power persist: Chinese firms have “transactional literacy” while Nigeria lacks comparable “institutional coordination and negotiation capacity.” Nigeria-China clean energy cooperation is presented as “a strategic national development issue” requiring coordinated institutions and strong local ownership to move “from ad hoc deal-making to a structured platform for industrial transformation.”