Nigeria has signed a Presidential Power Initiative (PPI) agreement with Germany to add 12,000 million watts of electricity to the national grid.
The Power initiative which is to be financed under the Government export credit facility, currently provided by a few German banks to Nigeria, will cost about $60 million with the importation of 10 transformers and 10 power mobile stations.
President Bola Ahmed Tinubu and the German Chancellor Olaf Scholz both presided over the signing on Friday in Dubai, United Arab Emirates (UAE), at the sidelines of the United Nations Climate Conference (COP28) taking place at the Expo City in Dubai.
The Managing Director of the Federal Government of Nigeria Power Company, Kenny Anue signed on behalf of Nigeria while the Managing Director (Africa) Siemens AG, Nadja Haakansson, signed for Siemens.
Speaking on the agreement, Anue affirmed the commitment of President Tinubu to the development of power infrastructure in Nigeria, noting that he had reiterated that infrastructure development is critical to the ongoing reforms.
He also stated that electricity and financing are at the heart of the economic reform agenda of the administration, adding that the PPI by design encapsulates both elements with the support of partners, Siemens Energy and the financiers that are backed by the German government.
Addressing the President, Anue noted: “Mr President, with your strong and dynamic leadership through the Honorable Minister of power, now we seek to exploit or expedite what was already a worthwhile program in the presidential power initiative through this accelerated agreement today.
“Some of the things that have been achieved, erstwhile by the federal government have been the establishment of the FGN Power Company as the special purpose vehicle for the implementation of the project.”
He added that the German government has nominated the mandated lead arrangers and financiers, emphasising that Siemens Energy has also successfully delivered 10 units of power transformers and 10 units of mobile substations.
In his remarks, the Chairman of Siemens Energy Supervisory Board, Joe Kaeser, traced the history of the initial agreement to the Muhammadu Buhari administration in 2018, expressing delight that both parties have now been able to drive the process forward.
“I’m particularly happy to be here tonight to witness the signing of the Presidential Initiative for Power because in 2018 former President Buhari wanted me to come to Abuja and explain to him what we did in Egypt.
“And I said Mr. President, Egypt has 80 million (people) and we could use 14 gigawatts and Nigeria has 200 million people. So, we could need more gigawatts.
“Now, after five years, I’m really happy that this agreement has the spirit of supplying energy to the greater good of Nigerian people has been taken to a new level. Thank you very much for doing that. And as we say in Germany good things take time as we have seen tonight.”
Speaking on the project, the Minister of Power, Adebayo Adelabu, said the target of the PPI is to add 12,000mw of electricity to the national grid.
He said with the signing on Friday, the process will now proceed apace to ensure a constant supply of electricity to Nigerians.
“Of course, we knew that there were a lot of delays between 2018 and now that we have not made a significant achievement in terms of proceeding with the contract signed in 2018 because of a lot of factors some were natural, some human, some were processes.
“We also had COVID in 2020 which made the execution of the project slow. But now, it shows that we are now ready to move forward with the Siemens projects.
“It shows a commitment between the governments of both countries to proceed with this project, which we believe will go a long way in improving the performance of the power sector in Nigeria.
“This is an agreement that has to do with end-to-end fixing in terms of grid stabilisation of the entire transmission grid in the Nigerian power sector, which will eventually improve the power supply in terms of regularity, in terms of functionality and terms of affordability in the years to come.
“We’re delighted that we can sign this agreement tonight. And in the next couple of months, we will witness a lot of activities on the presidential power initiatives project.”
On the financial implications, he revealed that the project is to be financed under the Government export credit facility that is being provided by a couple of German banks to Nigeria.
“The original agreement we had was for $2.3 billion. But what we have is up to date, just in the region of $60 million, which has to do with the importation of the 10 transformers and the 10 power mobile substations, which Siemens have delivered to the country.
“They have been commissioned and we are in the presence of installation of these transformers. So far, it has cost us 60 million dollars.”
Among Nigerian officials present at the ceremony were Attorney-General of the Federation, Lateef Fagbemi; Minister of Aviation, Festus Keyamo; Power, Adelabu; Environment, Balarabe Lawal; Transportation, Said Alkali; Industry, Trade and Investment, Dr Dorris Anite and Agriculture, Abubakar Kyari.