Why we awarded Siemens 25,000mw power revamp contract –Nigerian govt

The Nigerian government on Monday revealed it chose Germany’s Siemens AG for the country’s power sector revamp and upgrade of its grid capacity to 25,000 megawatts (mw) on the strength of the firm’s global reputation and track record in the business.

“First and foremost, let me state that Siemens was chosen because they are the best in the business and have already undertaken similar initiatives elsewhere in Egypt and Iraq.

“Furthermore, they have experience operating in the local environment, which means we will have no issues in the implementation process,” Power Minister, Sale Mamman said in a series of tweets on his official Twitter handle, @PowerMinNigeria.

Nigeria’s all-time peak generation 5,420mw on 19^th August but crumbled to 3,356mw 48 hours after.

Mr Mamman noted that the Siemens deal, which would transform the country’s largely dilapidated power infrastructure, was monumental for the sector by virtue of its potential of enhancing the grid’s operational capacity.

“It will open up corridors for evacuation that will greatly reduce the burden of delivered capacity, which is costing the sector so much.

“Investors will be more confident to participate in the sector as the grid achieves more functional operational capacity. This will also reduce financing cost in the evacuation process.”

Read also: Siemens deal will deliver 3,800 power and distribution transformers –Nigerian govt

The project, which the minister said had kicked off, is expected to be completed in five years, with implementation taking place in three phases.

According to him, the first phase will concentrate on expanding the end-to-end operational grid capacity to 7,000mw while the second aims to enlarge the capacity of the transmission and distribution systems to enable evacuation of up to 11,000mw to end-users.

“Phase three targets expanding the power grid to 25GW capacity through further expansion of the generation, transmission and distribution systems,” he stated.

Towards consummating the deal, Mamman said the Nigerian government had to endorse an institutional framework comprising a government-sponsored Special Purpose Vehicle (SPV).

“The SPV is capitalised by the Ministry of Finance to among others, serve as a regulator and guarantor of the project, representing the Federal Government in the Presidential Power Initiative negotiation.”

In July, the Federal Executive Council approved payment of €15.21 million (N6,940,081,465.20) offshore and N1.708 billion onshore as part of Nigeria’s counterpart fund for the Siemens deal.

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