Page 10 - AfrElec Week 22

AfrElec INVESTMENT AfrElec

Nigerian President outlines

grid deal with Siemens

NIGERIA NIGERIAN President Muhammadu Buhari has Mamman and the finance ministers to “com-
approved his government’s 2019 deal with Sie- mence the pre-engineering and concessionary
mens to rehabilitate the country’s ailing power financing aspects” of the project with Siemens.
grid. The project will be financed by concession-
The deal covers major upgrades and expan- ary loans covered by Euler Hermes Group SAS,
sion to the national grid, and covers a range of a large provider of credit insurance.
transmission and distribution projects that aim Buhari said that Siemens would be solely
to raise wheeling capacity to 25,000MW by 2025. responsible for nominating its engineering, pro-
Siemens and the Nigerian government signed curement and construction (EPC) partners for
a six-year agreement in July 2019. The president the project, without the involvement of middle-
recently asked the Ministry of Finance, Budget men or intermediary companies. This is being
and National Planning, the Ministry of Power done in a bid to reduce corruption and waste.
and the Bureau of Public Enterprises to com- The project will be developed in three
mence with the pre-engineering and concession- phases. The first includes creating an additional
ary financing aspects of the project with Siemens. 2,000MW of grid capacity and also significantly
The deal, called the Presidential Power Initi- reducing losses across the grid by improving
ative (PPI), was signed during German Chan- stability and reliability. This will raise capacity to
cellor Angela Merkel’s visit to Nigeria in August 7,000MW.
2019. In the second phase, grid capacity is expected
“Our goal is simply to deliver electricity to to be increased from 7,000MW to 11,000MW.
Nigerian businesses and homes. Our intention In the third phase, the country’s grid opera-
is to ensure that our co-operation is structured tor Transmission Company of Nigeria (TCN)
under a government-to-government frame- will install additional transmission and distri-
work. No middlemen will be involved so that we bution assets to increase the grid capacity from
can achieve value for money for Nigerians,” said 11,000MW to 25,000MW.
Buhari. The PPI also aims to improve power supply
Buhari has now approved the release of nationwide, provide training and capacity build-
financing to kick-start the project, although its ing for Nigerian youths, create economic oppor-
value was not announced. He said that Interna- tunities for Nigerian engineering companies and
tional Finance Corporation (IFC) would assist in stimulate inflow of additional investment into
developing the commercial structure of the pro- the power sector.
ject. The IFC is also to carry out an independent Although access to power stands at about
valuation of the privately owned distribution 60% in Nigeria, supply is very unreliable and
companies (discos), which are in deep financial rarely available for 24 hours.
trouble and plagued by non-payment of bills by The country has 13,000MW of installed gen-
customers. erating capacity, but available grid capacity cur-
Buhari has asked Power Minister Sale rently stands at an average of 5,000MW.™

P10 www. NEWSBASE .com Week 22 04•June•2020