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AfrElec COMMENTARY AfrElec

Siemens chief talks up

power reform in Nigeria

The heavily indebted distribution sector is the key challenge to expanding
Nigeria’s grid capacity to 25,000MW by 2025, writes Richard Lockhart

NIGERIA SIEMENS Nigeria CEO Onyeche Tifase has Siemens and the Nigerian government signed
identified the distribution sector as the major a six-year agreement in July 2019 for what is also
WHAT: barrier to Nigeria achieving 25,000MW of grid known as the Nigeria Electrification Roadmap.
Siemens is confident capacity by 2025. Buhari has since asked the Ministry of
that it can meet its Tifase said on Nigerian’s Arise Television this Finance, Budget and National Planning, the
commitment to reach week that Siemens was working closely with all Ministry of Power and the Bureau of Public
25,000MW in Nigeria companies in the Nigerian power sector, as well Enterprises to commence with the pre-engineer-
as the government, in order to meet the target. ing and concessionary financing aspects of the
WHY: Tifase said that Siemens aims to ensure that project with Siemens.
It aims to focus its reform all of the country’s 14,000MW of installed capac- The International Finance Corporation (IFC)
programme on the ity is operational. Currently, wheeling capacity, will assist in developing the commercial struc-
distribution sector the amount of power available to customers, is ture of the project.
around 5,000MW. The IFC is also to carry out an independent
WHAT NEXT: Although access to power stands at about valuation of the privately owned distribution
With presidential 60% in Nigeria, supply is very unreliable and companies (Discos), which are in deep financial
backing, the programme rarely available for 24 hours. trouble and plagued by non-payment of bills by
has strong support, but customers.
it must tackle debt, poor German deal
payment discipline and She said that Siemens was confident that the pro- Costs and local content
unreliable output from ject would succeed, insisting that the German Tifase said that the first target was to increase
the gas sector company had done its due diligence and incor- wheeling capacity to 7,000MW.
porated buffers in its discussions with the federal In the second phase, grid capacity is antic-
government, including obtaining a commitment ipated to be increased from 7,000MW to
for a sovereign guarantee. 11,000MW.
Siemens’ involvement with the turnaround of In the third phase, the country’s grid opera-
Nigeria’s power sector, dubbed the Presidential tor, Transmission Company of Nigeria (TCN),
Power Initiative (PPI), was approved by Nige- will install additional transmission and distri-
rian President Muhammadu Buhari in June bution assets to increase the grid capacity from
2020. This followed German Chancellor Angela 11,000MW to 25,000MW.
Merkel’s visit to Nigeria in August 2019. “Even the Discos and TCN have their

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