As part of the ongoing effort to improve power supply, Nigeria and Germany have recently signed Presidential Power Initiative (PPI) agreement, which was ratified by President Bola Tinubu and German Chancellor Olaf Scholz. This took place at the sideline of the United Nations Climate Conference (COP28), which was held in Expo City, Dubai. The agreement, according to Nigerian Minister of Power Adebayo Adelabu, is intended to eventually add 12,000MW of energy to the country’s existing infrastructure. Germany was represented by Nadja Haakansson, Managing Director (Africa) Siemens AG, while Nigeria was represented by Kenny Anue, Managing Director of the Federal Government of Nigeria Power Company.
Speaking on the deal, Anue again emphasized President Tinubu’s dedication to the development of power infrastructure, pointing out that he has stated repeatedly how important infrastructure development is to the administration’s ongoing reforms. According to him, the PPI, which has the backing of Siemens Energy and lenders backed by the German government, incorporates both components by design. He mentioned the creation of the FGN Power Company as the project’s special purpose vehicle as one of the accomplishments previously made by the federal administration.
Multiple obstacles impede the contract signing process since 2018.
Additionally, he said the German government has designated the required lead arrangers and financiers. Siemens Energy had also successfully supplied ten power transformers and ten units of mobile substations. In his remarks, Joe Kaeser, the chairman of the Siemens Energy Supervisory Board, expressed satisfaction that both sides could now move the process forward, an agreement which has long existed since the tenure of Muhammadu Buhari government in 2018. The initiative’s aim, according to Minister of Power Adebayo Adelabu, is to add 12,000MW of electricity to the country’s electrical grid.
Following the recent signing of the agreement, he said, the process will now move swiftly to guarantee Nigerians a steady supply of electricity. According to him, there have been multiple obstacles to the contract signing process since 2018, which has resulted in a reversal of the progress achieved thus far. In addition, the COVID-19 pandemic created barriers that slowed down the project’s implementation. Nonetheless, there are now signs that the nation is prepared to proceed with the Siemens projects.
Funding to be provided by the government export credit facility.
Furthermore, this progress demonstrates the shared dedication of both nations’ governments to further see to the successful implementation of the project, which is anticipated to significantly enhance the capacity of the Nigeria electricity industry. Also, it was stated that the agreement is related to the comprehensive restructuring of the framework for the whole transmission grid stabilization within the Nigerian power industry. Thereby, ultimately enhancing the power supply’s capacity, regularity, functionality, and affordability in the near future
While expressing delight with the project’s signing, he indicated that there will be a lot of engagement on the presidential power initiatives project in the coming months. In terms of funding, he stated that the project will be funded by the Government export credit facility offered to Nigeria by a few German banks. He went on to say that while the initial arrangement was for $2.3 billion, current budget is now roughly $60 million, which is due to the importation of the ten transformers and ten power mobile substations that Siemens has sent and ready for installation.
A 6 year contract worth $3.8 billion was signed with Siemens AG.
Nigerians can look forward to improved electricity supplies in their nation with the signing of this new agreement with the German government. The government has been working very hard to improve the availability of power in recent years. One major achievement is the six-year contract worth approximately 1.15 trillion naira ($3.8 billion), that was signed with Germany’s Siemens AG for a three-phase electrification project that will raise Nigeria’s power to 25,000MW. The country began receiving its first shipment of transformers late last year after factory testing was conducted in Germany and Italy.