The Federal Executive Council (FEC) has approved a contract worth N262.75 billion (€161.33 million) for the first phase of the Presidential Power Initiative (PPI), also known as the Siemens Project. The initiative aims to upgrade and expand critical power infrastructure in Nigeria to improve electricity transmission.
Minister of Power, Adebayo Adelabu, announced the approval during a briefing with State House correspondents on Monday at the Presidential Villa, Abuja. According to him, this marks a significant step forward following the successful completion of the pilot phase of the project.
The approved contract involves the engineering, procurement, construction, and financing of 330/132KV and 132/33KV substations in Onitsha, Offa, Abeokuta, Ayede, and Sokoto.
Adelabu explained, “There were two approvals for the Federal Ministry of Power. The first was for the contract award to implement the upgrade of 14 existing (‘brownfield’) substations and the construction of 21 new (‘greenfield’) substations under Phase I of the Presidential Power Initiative, popularly known as the Siemens Project.”
He added, “The first batch of this Phase I project includes Onitsha 330/132KV substation under the Enugu Electricity Distribution Company, Offa 132/33KV substation under the Ibadan Electricity Distribution Company, a new Abeokuta 330/132KV substation, Ayede 330/132KV substation, and Sokoto 132/33KV substation. These projects are designed to stabilize and improve the transmission segment of Nigeria’s power sector.”
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The Siemens Project is part of a long-term plan to inject 12,000 megawatts (MW) of electricity into Nigeria’s national grid. The agreement for the project was originally signed between Nigeria and Germany in 2018 under former President Muhammadu Buhari’s administration but faced delays due to the COVID-19 pandemic and transitional changes.
On December 1, 2023, President Bola Tinubu and German Chancellor Olaf Scholz renewed the agreement during the United Nations Climate Change Summit (COP28) in Dubai. Managing Director of the Federal Government of Nigeria Power Company, Kenny Anuwe, and Siemens Africa Managing Director, Nadja Haakansson, signed the updated deal.
Adelabu highlighted the urgency of Monday’s approval, noting that commercial terms agreed upon during the German Chancellor’s visit are set to expire on December 28, 2023. “This decision ensures that we do not miss the deadline, further demonstrating our commitment to resolving Nigeria’s power challenges,” he said.
The FEC also approved N1.7 billion for the outright purchase of an office complex for the Nigeria Electricity Liability Management Company (NELMCO). Adelabu explained, “The office, located in Wuse 1, Abuja, will replace the company’s current rented space. This move avoids escalating rental costs and provides a stable base for the company to expand its operations and meet its mandate.”
NELMCO, established under the Electricity Power Sector Reform Act of 2005, plays a critical role in managing liabilities and obligations stemming from the privatization of Nigeria’s power sector.
Adelabu clarified that the Siemens Project’s current phase is not the first. The pilot phase, completed earlier, demonstrated the initiative’s feasibility in addressing Nigeria’s long-standing energy crisis. Delays over the years were attributed to the pandemic and administrative transitions.
“This government is determined to fast-track the project to ensure it achieves its objectives of improving electricity supply and transforming Nigeria’s power sector,” the minister concluded.