Three months ago, Phase One of the Siemens power deal reached 80-percent completion, according to the FGN Power Company. The pilot project, which is described as a quick-win intervention strategy, aims to address immediate constraints in the Nigerian Electricity Supply Industry (NESI). After the projects under this phase are implemented, it is expected to result in the delivery of an additional 2,000 megawatts of power. This will bring with it the creation of 2 million new connections to the national grid, the training of over 5000 engineers to operate the system network, and improved electricity access for millions of Nigerians.
Mr. Kenny Anuwe, the Managing Director of the FGN Power Company, revealed that approximately 80 percent of the necessary equipment for the pilot projects have already been received. These crucial parts are being deployed to strategic sites, such as Apo, Ajah, Okene, Nike Lake, Kwanar Dangora, Maryland, Omouaran, Ojo, Amukpe, Ihovbor, Potiskum, Birnin Kebbi, and others, with the aim of enhancing electricity transmission capacity. He cited the installation of the 60 MVA Siemens transformer at the Apo Transmission Substation in Abuja, which was commissioned in November 2022.
FG gives an update on phase one of the project.
Presently, the German company had said that the Presidential Power Initiative (PPI) would be completed five years before the due date in 2030. Oladayo Orolu, head of business development and government relations at Siemens Energy, revealed this in an interview with Bloomberg. According to him, the COVID-19 pandemic disrupted the supply chains, causing the delays. In the interview, he said that the rehabilitation and expansion of Nigeria’s electricity grid will happen by 2025, and the company will now only conclude the project in 2030.
In a report, the company stated, “When we conceptualized this project in 2018, our plan was within two years we should be done with phase one, but then Covid happened, disrupting supply chains, which meant getting raw materials took longer than before.” It added that cost overruns also affected the project’s completion. Siemens power expects electricity output to increase by an additional 2,000 megawatts at the completion of phase one by 2025, with the objective of phase one to quickly fix projects that will free up 2,000 megawatts.
Nigeria current capacity is 5,000 megawatts.
Additionally, the report noted that the cost of some raw materials have doubled, while some others are just marginally higher. In 2020, phase one was projected to cost about €2 billion. Presently, Nigeria power-generating capacity is at 5,000 megawatts. The project aims to increase it to 7,000 in 2025. With the country’s massive population, electricity needs are much more humongous than the meager capacity that the country currently runs with. The majority of the people’s power needs are met through alternative means.
Some of these alternative means include using solar panels, wind energy and generators. Of all these, generators are the most common. The reason is that these machines are easier to buy and set up than the others. However, the cost of fueling them has more than doubled since the president removed the subsidy of Premium Motor Spirit (PMS). A liter of PMS, which used to sell for N187, now sells for more than N600. Some business owners have reported buying it as high as N700 per liter.
Increasing the country electricity-generating capacity will ease burdens.
If the government can achieve the feat of increasing supply capacity in the sector, the burden of many will be eased. This will especially benefit artisans (such as welders, tailors, bakers, etc.) and factories who rely mostly on electricity for their daily business activities. It will not only reduce the number of households and businesses dependent on generators but also create an avenue for the government to generate more money. As well, it will contribute to job creation and establishing an enabling environment for businesses.