Nigeria’s minister of power, Mr Sale Mamman, has said that the new electricity deal between the federal government, its German counterpart and Siemens AG, will involve the upgrading of 105 power substations and the construction of 70 new ones.
The minister said the deal, of which the Nigerian government has made initial commitment of N8.6billion, represents one of the largest and most transparent power sector investments in modern day Nigeria. Adding that it provided what he described as ‘key details’ of the Presidential Power Initiative (PPI) deal which has already into effect.
Listing the details under major infrastructural points, project timeline and expansion outcomes, Mamman explained that the deal would totally transform the sector. He stressed that aside the 105 sub-stations to be upgraded and 70 new sub-stations to be built under the new arrangement, 35 power transformers will also be manufactured and installed.
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The minister also disclosed that 3,765 distribution transformers would be installed and 5,109 km distribution lines will be built with a potential generation capacity of over 13,000mw as opposed to the current transmission of 4,500mw.
According to Mamman, in the Phase one, 7gw is expected to be achieved between now and 2021. Adding that the upgrading of transmission and distribution of the Transmission Company of Nigeria (TCN) and distribution companies (Discos) expected to contribute an additional 2gw.
For phase two, he said, 11gw will be achieved between 2021-2023, with full use of existing generation and last mile distribution capacity. Furthermore, the phase three would involve the achievement of 25gw between 2023-2025 with appropriate upgrades and expansion in generation, transmission and distribution.
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Last week, the Federal Executive Council (FEC) approved the payment of €15.21 million (N6,940,081,465.20) offshore and N1.708 billion onshore as part of Nigeria’s counterpart funding for the power deal signed in 2019.
The deal also involved Siemens’ support for the regulator, the Nigerian Electricity Regulatory Commission (NERC), towards improving metering in the electricity industry in the country. The financiers would get up to a three-year moratorium with a 12-year repayment at concessionary interest rates.
According to the details, Siemens will singlehandedly pick the engineering, procurement and construction (EPC) partners for the sake of transparency, whereas all items to be purchased would be provided by the Discos and TCN, they would be vetted by a professional project management office.
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It will be backed through a German Euler Hermes cover, while the International Finance Corporation (IFC) will be engaged to assist in developing the commercial structure of the intervention, as well as in undertaking an independent company valuation of the Distribution companies.
By Chibisi Ohakah, Abuja
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