Nigeria’s Ministry of Power has released in clear infographics, details of the Presidential Power Initiative (PPI) agreement between the Federal Government of Nigeria, Siemens AG, and the Government of Germany. The deal, which went into effect last week, is one of the largest and most transparent power sector investments in the history of modern Nigeria.
Switch Nigeria had reported a week ago that the Federal Government of Nigeria’s Federal Executive Council had approved €15.21 million and ₦1.708 billion for preliminary power upgrade projects. The Federal Government in May this year, disclosed that the funding for the PPI will be secured under concessionary terms which could take up to 3-year moratorium and 12-year repayment at the concessionary interest rates, via the German Euler Hermes cover which the Federal Government will on-lend as a convertible loan to the other shareholders in the Distribution Companies.
As part of the Programme, 105 substations are set to be upgraded; 70 additional substations are set to be built; 35 power transformers are to be manufactured and installed; 3,765 distribution transformers to be installed; and 5,109 kilometers of distribution lines are to be built.
The Programme will be concluded by the year 2025. The timeline runs as follows:
- Phase One: 7 Giga Watts (2020 to 2021). Upgrading transmission and distribution involving Transmission Company of Nigeria (TCN) and Distribution Companies (DisCos) with additional 2 Giga Watts (GW)
- Phase Two: 11 GW (2021 to 2023). Full use of existing generation and last mile distribution capacity
- Phase Three: 25 GW (2023 to 2025). Appropriate upgrades and expansions in generation, transmission, and distribution.
The current transmission and distribution capacity is poor, with about 13000 MW being generated but less than 5000 MW being distributed. Current state of the Power Sector and expansion outcomes so far is underwhelming.
Shockingly, Nigeria has lost about ₦254 billion in cost of undelivered available generated power (electricity capacity) between February 2015 and April 2020. That is a massive lost caused by poor transmission and distribution.