Nigeria enters deal with Siemens to revamp power sector
President Muhammadu Buhari has endorsed a revamp pact with Germany’s multinational engineering firm, Siemens AG, to transform the country’s moribund power sector.
Nigeria scaled the first hurdle of the approval process in July when it struck a synergy with Siemens for the expansion and overhaul of its electricity grid.
In a series of tweets posted on the presidency’s Twitter handle on Wednesday, @NGRPresident, Buhari ordered the Ministry of Power, the Ministry of Finance, Budget and National Planning, and the Bureau of Public Enterprises to perfect the arrangement “with Siemens AG to commence the pre-engineering and concessionary financing aspects of the Presidential Power Initiative.”
Originally conceived in 2018 as part of the Nigerian Electrification Roadmap, the initiative is hoped to birth a paradigm shift across the full breadth of the power value chain and deliver improved electricity supply at industrial and household levels in Nigeria, where only one out of every five people have access to electricity.
“All items to be purchased were provided by the distribution companies and Transmission Company of Nigeria and they will be vetted by a professional project management office,” the president said.
Read also: Senate to probe FG intervention in power sector
The deal has, as part of its conditions, a “12-year repayment at concessionary (interest rates) through the German Euler Hermes cover, which Nigeria will on-lend as a convertible loan to the other shareholders in the Discos” as well as a moratorium lasting for 36 months.
“All Discos have, directly, and through the BPE, been diligently carried along over the last 15 months to understand in detail the challenges in the electricity system.
“The PPI is a power infrastructure upgrade and modernisation programme agreed to by Nigerian government and Siemens AG of Germany, with the support of the German Government.
“Under the PPI, Nigerian government will on behalf of the other shareholders in the Discos invest in infrastructure upgrades in the form of improved payment systems, distribution substations, transformers, protection devices, smart meters, transmission lines, etc,” the presidency said.
It added that funds for the initial stage of the initiative, which would launch the pre-engineering and concession financing work streams, had been approved.
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