Nigeria’s President Muhammadu Buhari, has directed the ministries of power and finance, and the Bureau of Public Enterprises (BPE) to immediately begin the process of finalising the financing agreement with Siemens AG, to ramp up the power supply in the country.
Recall that Buhari in 2019, signed a power project deal With the Germany-based firm, to deliver 7,000 megawatts (MW) of electricity to the national grid by 2021.
However the move by the president sparked controversy by the Distribution Companies (Discos), as they had kicked against the deal, insisting that the federal government could not negotiate on their behalf, at the time, the presidency noted that all parties had been carried along in arriving at the present stage.
But Buhari, in a series of tweet on Wednesday, called on the ministry of power, finance and the Bureau of Public Enterprises (BPE) to finalise the engagement with the company for work to begin on the project.
“President Buhari has directed the Ministries of Power and Finance, and the Bureau of Public Enterprise (BPE) to conclude the engagement with Siemens AG to commence the pre-engineering and concessionary financing aspects of the Presidential Power Initiative,” the presidency tweeted.
“The Presidential Power Initiative (PPI) is a power infrastructure upgrade and modernization Programme agreed to by Nigerian government and Siemens AG of Germany, with the support of the German Government.
“Under the PPI, the Nigerian government will on behalf of the other shareholders in the Electricity Distribution Cos. invest in infrastructure upgrades in the form of improved payment systems, distribution substations, transformers, protection devices, smart meters, transmission lines, etc.
“The funding for the PPI will be secured under concessionary terms (up to 3-year moratorium and 12-year repayment at concessionary interest rates) through the German Euler Hermes cover, which the Nigeria government will on-lend as a convertible loan to the other shareholders in the DisCos.
“President Buhari has approved the release of funding for the first part of Phase 1 of the PPI, to kick-off the pre-engineering and concession financing workstreams.”
President Muhammadu Buhari had during the signing of the power deal, directed both teams from the company and their Nigerian counterparts to first focus on fixing the transmission and distribution infrastructure that had posed a challenge in the Nigeria Electricity Supply Industry.
He added that the ultimate goal of the of the project was to achieve 7,000 megawatts of reliable power supply by 2021 and 11,000 megawatts by 2023 in phases one and two respectively.