Nigeria Releases €63m For Phase-One of Siemens Power Project
By Chibisi Ohakah, Abuja
Nigeria’s Federal Executive Council (FEC) has approved the sum $1.9 million and €62.9 million for the achievement of phase-one of the Presidential Power Initiative (PPI). The Initiative is an upgrade and modernization programme between the Nigerian government and Siemens with the support of the German government.
Announcing the approval of the sums on Wednesday, the minister for finance, budget and planning, Hajia Zainab Ahmed said $1.9 million will be used for payment of transactions advisors and third-party consultants for the power project.
In July, 2019, the federal government signed a power project deal (PPI) with Siemens AG to up the country’s electricity generation to 25,000 megawatts in six years. A year after, the country’s President, Muhammadu Buhari approved the payment of €15.21 million and N1.708 billion as counterpart funding for the PPI.
Commenting on the new approvals, the finance minister said: “The first memo that we presented to council was seeking Council’s approval for the engagement of Africa Finance Corporation (AFC) as transaction advisors with third-party consultants for the implementation of the Presidential Power Initiative (phase one),” Ahmed said
“So, the AFC, the transaction advisors, their fee is $800,000 and the transaction period is 18 months and this includes their reimbursable expenses. The second component is the engagement of third party consultants and this includes local as well as international legal advisory firms, environmental and social impact assessment consultants, security consultants, insurance advisors, as well as tax and model auditor,” she said.
According to her, these parties are collectively engaged in the sum of $1,116,312.45. The objective of the PPI project is to modernize and upgrade power transmission and distribution infrastructure in Nigeria.
The finance minister also explained that €62 million will be used for the procurement of mobile equipment and transformers for the transmission of power across the country.
“The second approval that we got from Council today is still relating to the PPI power project and the memo was seeking the approval of Council for the procurement of mobile equipment for the transmission power component of the project. So, we have 10 mobile equipment and 10 transformers in favour of Siemens AG.
“The total cost of the procurement is in the sum of 62,949,447 euros with a delivery period of 12 to 18 months, dependent on how we’re able to push because this equipment will be manufactured specifically for us. The focus is to be able to very quickly enhance the power availability and capacity in the country,” she said.
According to her, with the current approval, Nigeria will be able to expand from the current capacity of 5000 megawatts to 7000 megawatts.
The minister of power, Abubakar Aliyu, had hinted a fortnight ago that the Siemens power project would commence in the first quarter of 2022. At a workshop early this month in Lagos, minister of power, Abubarkar Aliyu, signaled that Nigeria is ready to breathe life into the project. He assured that the project would expand Nigeria’s electricity from the current 4,500mw to 25,000mw.
The Presidential Power Initiative (PPI), which began in 2021, is in three phases and is estimated to be completed in 2025. The phases cover the upgrading and expanding the Transmission Networks (TN) and distribution companies (DisCos) networks; improvement of access to affordable, efficient and reliable electricity and, providing support of industrial and economic growth in the country.
The first phase, which effectively started with the latest approvals, is expected to go on for a period of 10 months with the end goal of pushing to 7,000MW. Until now, the project had been in the pre-engineering phase.
The minister of power had further hinted that the second phase will raise the availability to 1,000MW, while the third phase will ultimately raise the availability to 25,000MW.