President MuhammaduBuhari has initiated the next phase of a deal with Siemens AG to upgrade Nigeria's dilapidated power infrastructure. The government of Africa’s largest economy and the German engineering firm signed an agreement in July 2019, to recover and then expand the country’s electricity grid. Only about 60% of residents in the country have access to power and even those that do are haunted by regularity.
President MuhammaduBuhari has directed the Ministries of Power, Finance, and the Bureau of Public Enterprise (BPE) to conclude the nation’s engagement with Siemens AG over the regular power supply. The directive, which was issued via the Presidency’s Twitter handle on Wednesday, was to start the pre-engineering & concessionary financing aspects of the Presidential Power Initiative (PPI).
Nigeria has more than 13,000 megawatts of installed electricity generation capacity but only 7,500 megawatts of that is available and less than 4,000 megawatts is dispatched to the grid every day. The partnership with Siemens which is in three phases will upgrade and modernize the existing network before enlarging it until the country can produce and distribute 25,000 megawatts.
The project will be financed by concessionary loans covered by Euler Hermes Group SAS, a large provider of credit insurance, the statement said. The government will “on-lend” the funding to the shareholders of Nigeria’s power distribution companies and Siemens will have sole responsibility for selecting its contractors.