Adebayo Adelabu, the Minister of Power, has announced that the Nigerian federal government is in the process of finalising plans to allocate $800 million for the improvement of the country’s Power Supply Infrastructure through the Presidential Power Initiative (PPI). This initiative also referred to as the Siemens project, will focus on the Construction of Electricity substations and distribution line Adelabu clarified during a visit to TBEA Southern Power Transmission and Distribution Industry in Beijing, China, as part of the China-Africa Cooperation Summit, that the funds would be assigned to individual sections of the facility.
He mentioned that the funds will be used to build substations for Lot 2, which includes the franchise areas of Benin, Port Harcourt, and Enugu Distribution Companies (Discos), as well as for Lot 3, covering the franchise areas of Abuja, Jos, Kaduna, and Kano Discos. The cost for each project is $400 million. In July 2019, the Nigerian government partnered with Siemens, a German engineering company, to launch the Presidential Power Initiative. This initiative focuses on upgrading and expanding the country’s national electricity grid by investing in all aspects of the electricity sector, from generation to transmission and distribution.
Electricity production will reach 25,000MW once all phases are finished.
The government was determined to produce 7,000 megawatts of electricity by 2021 and 11,000 megawatts by 2023 in two distinct phases. Despite facing setbacks and delays, the initiative is receiving strong financial backing from the government with substantial commitments. In 2020, they provided part funding of €15.21 million and ₦1.708 billion, and in 2021, an additional $1.9 million and €62.9 million were allocated towards this project. Adelabu highlighted that the $800 million funding is a crucial component of the comprehensive project aimed at boosting Nigeria’s electricity production to 25,000MW once all phases are finished.
Nigeria’s counterpart funding is once again being allocated to support critical projects. Over half of Nigeria’s industries are not connected to the national grid, mainly due to its lack of reliability. A specific incident was mentioned where 1,400 megawatts had to be reduced because the Discos were unable to handle the power generated, even though the peak generation reached 5,170 megawatts. Adelabu expressed disappointment, stating that it is unfortunate as the government’s goal is to reach 6,000 megawatts in Electricity Generation by the end of the year.
TBEA will support achieving the President’s goals for the power sector.
Furthermore, he reaffirmed the government’s dedication to collaborating with international organisations such as TBEA to achieve President Bola Tinubu’s goals for improving the power sector, particularly in transmission, distribution, and renewable energy. Highlighting the outdated and deteriorating state of Nigeria’s transmission and distribution infrastructure, he emphasised the need for urgent action to address the issue of unreliable power supply. Also, he observed that several industries have been compelled to generate their own power due to the lack of reliability in the current system.
Adelabu detailed the government’s plan for revolutionising the industry, noting that back in 1984, Nigeria’s Power Generation was limited to just 2,000 megawatts, a capacity that took over three decades to double. Yet, in the span of just one year, the present administration has managed to raise the output from 4,000 megawatts to 5,170 megawatts. Their goal is to achieve 6,000 megawatts of power by the year-end through a combination of hydroelectric and gas-powered plants and to produce, transport, and deliver 30 gigawatts by 2030, with 30% derived from Renewable Energy sources.
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Moreover, the government is focused on building a super-grid in both the Western and Eastern regions to enhance the capacity and stability of the national grid. Adelabu emphasised the necessity of this new super-grid due to the limitations of the current national grid and mentioned that approvals for the project are progressing well. Huang Hanjie, President of TBEA, voiced the company’s backing for Nigeria’s power sector goals. He reassured that TBEA is dedicated to sharing its vast international knowledge and working closely with the Nigerian government to accomplish these objectives, particularly in relation to the super-grid project that is being discussed.