The Federal Executive Council has approved a funding of N262.75bn (€161.33 million) for the first phase of the Presidential Power Initiative.
This phase includes the engineering, procurement, construction, and financing of 330/132 KV and 132/33 KV substations in various locations, including Onitsha, Offa, Abeokuta, Ayede, and Sokoto.
This was disclosed by the The Minister of Power, Mr Adebayo Adelabu, at the State House in his address to pressmen on the outcomes of Monday’s Federal Executive Council meeting at the Aso Rock Villa, Abuja.
Adelabu stated that Monday’s approval comes after the successful completion of 80% of the pilot phase of the Presidential Power Initiative. Otherwise known as the Siemens project.
On December 1, 2023, Nigeria and Germany signed the Presidential Power Initiative agreement, with the goal of adding 12,000 megawatts of electricity to Nigeria’s national grid.
The signing ceremony took place on the sidelines of the COP28 UN Climate Change Summit in Dubai, UAE, and was led by Nigerian President Bola Tinubu and German Chancellor, Olaf Scholz.
The Managing Director of the Federal Government of Nigeria Power Company, Kenny Anuwe, and the Managing Director (Africa), Siemens AG, Nadja Haakansson signed the agreement. However, the contracts date back to the tenure of former President Muhammadu Buhari in 2018.
Adelabu stated, “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).”
He explained that Phase I of the Siemens project focuses on the transmission, upgrade, and expansion of the power infrastructure. This includes upgrading and revamping 14 brownfield substations, as well as constructing 21 new Greenfield substations across the country to enhance the transmission segment.
“The first batch of this Phase I project includes Onitsha, 330/133 KV substation under the Enugu electricity distribution company; two, Offa 132/33 KV substation under the Ibadan electricity company.
“There is the new Abeokuta 330/132 KV substation. We have Ayede 330/132 KV substation. And lastly, Sokoto 132/33 KV substation.
“Those are the five substations to be worked upon under the first batch of Phase I of the Siemens project. And we expect that this will further improve and stabilise the transmission segment of the power sector value chain in no distant future on completion,” the power minister stated.
Adelabu disclosed that the second approval pertains to the award of a contract for the acquisition of an office complex for the Nigeria Electricity Liability Management Company.
He said, “The office complex approved for outright purchase is at Plot 2148, Cadastra Zone A02 Wuse 1 District Abuja. The cost of this acquisition is N1.7bn, including 7.5 per cent VAT.
“We all know that NELMCO is the product of the Electricity Power Sector Reform Act of 2005 DPSRA, with a very specialised role to play in ensuring the success of the electricity sector reform.
“The company currently resides in this particular facility, but it is expedient that the property be acquired to avoid the escalating rent, which is increasing regularly due to inflation. So this offer of outright purchase was opted for, and this will also enable the company to meet up with its expanded mandate and increase staff strength to meet its obligation.”
The minister explained that the approval was timely, as the commercial terms agreed upon during the German President’s visit last Wednesday were set to expire on December 28. This decision helps mitigate the risk of missing the deadline.
Additionally, the minister emphasized the project’s progress, noting that the current phase is not the first but follows a pilot stage.
This stage served as a proof of concept, demonstrating the project’s potential to address Nigeria’s energy crisis.
