The Federal Executive Council’s (FEC) approval of €161.3 million (N262.75bn)for the first phase of the Presidential Power Initiative (PPI) or Siemens Power Project Phase One will spark a transformation in Nigeria’s power sector, a Power sector commentator, Idris Ibrahim, has said.
The project involves the engineering, procurement, construction and financing for 330/132 KV and 132/33 KV substations in Onitsha, Offa, Abeokuta, Ayede and Sokoto.
The Siemens Power Project Phase One aims to increase Nigeria’s power generation capacity by 2,000 megawatts. The Minister of Power, Adebayo Adelabu, explained: “There were two approvals for the Federal Ministry of Power.
The first was an approval for the contract award for engineering, procurement, construction and financing for implementing the 330/132 KV and 132/33 KV substations upgrade under Phase I of the presidential initiative, popularly known as the Siemens project.
“Subsequent to the completion of the pilot phase of this project, the FEC at today’s meeting considered it necessary for us to move forward as promised by the President at a meeting he held with the President of the Republic of Germany last week.
“The cost of this first batch of phase one of the Siemens project approved this afternoon is €161.33 (N262.75bn).”
In an interview with New Telegraph over the weekend, he stated that the FEC’s approval of €161.3 million for Project Phase One marked a crucial step toward Nigeria’s energy security and economic prosperity.
According to him, as the project progresses, Nigerians can expect increased power generation, reduced energy costs; and enhanced economic opportunities.
He added that there would be enhance electricity distribution, reducing outages; support for economic growth through increased productivity; creation of jobs and stimulation of local industries; improved healthcare services and increase in access to education and digital opportunities.
According to him, for Nigeria’s economy, the project’s benefits are significant and include: Reduction in dependence on fossil fuels; increased foreign investment; improved infrastructure and enhanced competitiveness.
Idris said: “A new era of growth and development has begun in Nigeria, powered by the vision of its leaders and the expertise of innovative partners like Siemens.
Among the afore-mentioned benefits it will also ensure reliable electricity for homes and businesses and enhanced quality of life.
“The FEC’s approval of €161.3 million for Siemens Power Project Phase One is a landmark decision and marks a crucial step toward Nigeria’s energy security and economic prosperity.
A new era of growth and development has begun in Nigeria, powered by the vision of its leaders and the expertise of innovative partners like Siemens.
“Nigeria’s power sector has faced significant challenges since independence in 1960 including inadequate infrastructure, insufficient generation capacity and frequent outages.”
Different governments had embarked on reforms that included: National Electric Power Policy (2001) that was aimed to privatise and liberalise the power sector; Electric Power Sector Reform Act (2005) which established the Nigerian Electricity Regulatory Commission (NERC) and Power Sector Roadmap (2010) that focused on increasing generation capacity.
In further efforts to address the power inadequacies, on December 1, 2023, the Federal Governments of Nigeria and Germany signed the Presidential Power Initiative agreement to inject 12,000 MegaWatts of electricity into the national grid.
The signing of the agreement was by Managing Director of the Federal Government of Nigeria Power Company, Kenny Anuwe, and the Managing Director (Africa), Siemens AG, Nadja Haakansso.
The signing of the deal was presided over by a meeting between Tinubu and then German Chancellor Olaf Scholz, on the sidelines of the United Nations Climate Change Summit, COP28, in Dubai, the United Arab Emirates.
The contracts date back to the tenure of former President Muhammadu Buhari. The initiative was in effort to address power challenges in Nigeria.
So the federal government and German energy company Siemens AG signed the Nigerian Electrification Roadmap (NER) partnership, also known as the Presidential Power Initiative (PPI) in 2019.
The roadmap of the deal contains technical and commercial proposals for financing, implementing, and executing projects to revive the Nigerian power sector and manage Nigeria’s future electricity requirements.
The initiative was structured in three phases, executed over six years, up to 2025. Phase 1 (by 2021) entailed conducting quick impact projects to enhance the capacity of the existing grid system to utilize stranded generated power capacity, leading to an overall increase in operational power capacity from its current 5GW to 7GW.
Phase 2 (by 2023) involved tackling distribution network constraints and expanding the grid to further maximize the use of current generation capacities, in order to achieve a combined capacity of 11GW.
Phase 3 (by 2025) is to build out new generation systems, while further modernising and growing the national transmission and distribution (T&D) systems, in order to reach an overall full operational capacity of 25GW.
It was also aimed to increase power generation capacity by 2,000 MW. Three-phase project: was into: Phase 1: Transmission infrastructure upgrade; Phase 2: Distribution infrastructure upgrade and Phase 3: Generation capacity increase.
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