The Nigerian power sector operates well below its estimated capacity, with power outages being a frequent occurrence. To compensate for the power outages, the commercial and industrial sectors are increasingly using privately operated diesel generators to supply electricity. In 2004, total installed electricity capacity was 5.9 gigawatts (GW). Total electricity generation during 2004 was 19 billion kilowatthours (Bkwh), while total consumption was 18 Bkwh. Only 40 percent of Nigerians have access to electricity, the majority of whom are concentrated in urban areas. Despite endemic blackouts, customers are billed for services rendered, partially explaining Nigeria's widespread vandalism, power theft and Power Company Holding of Nigeria’s (PHCN) problems with payment collection.

China is becoming increasingly involved in Nigeria’s electric infrastructure developments. In early 2007, Nigeria awarded China Gezhouba Group Corporation (CGGC) and China Geo-Engineering Corporation (CGC) a hydroelectric project contract. Nigeria hopes the Mambilla power station, which will be located in northeastern Nigeria, will add 2,600 megawatts (MW) to the national grid. The project could be completed by 2012. In addition, China’s EXIM Bank, Su Zhong, and Sino Hydro have committed to funding the Zungeru (950-MW) hydroelectric projects. In March 2007, Nigeria’s Minister of Energy announced that the Zungeru project should be online soon, but he did not give a specific start-up date.