The Federal Executive Council has approved a sum of N262.75bn (€161.33m) for the first phase of the Presidential Power Initiative popularly referred to as the Siemens Project.
This phase focuses on engineering, procurement, construction, and financing for the development and upgrade of 330/132 KV and 132/33 KV substations in key locations, including Onitsha, Offa, Abeokuta, Ayede, and Sokoto.
The Minister of Power, Adebayo Adelabu, disclosed this while addressing State House Correspondents after Monday’s FEC meeting held at the Aso Rock Villa in Abuja.
He revealed that the project’s approval follows the successful completion of its pilot phase, which is now 80 per cent done.
Adelabu explained that the initiative, aimed at addressing Nigeria’s power challenges, stems from a bilateral agreement signed between the Nigerian and German governments on December 1, 2023.
The agreement, witnessed by President Bola Tinubu and German Chancellor Olaf Scholz during the COP28 summit in Dubai, intends to inject 12,000 megawatts into the national grid.
It was formalized by Kenny Anuwe, Managing Director of the Federal Government of Nigeria Power Company, and Nadja Haakansson, Managing Director (Africa) for Siemens AG.
He clarified, “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).”
Adelabu outlined that the current phase centers on transmission upgrades, encompassing the revitalization of 14 brownfield substations and the construction of 21 new greenfield substations nationwide.
He stated that the first batch under this phase includes five key substations:
Onitsha 330/132 KV substation under the Enugu Electricity Distribution Company.
Offa 132/33 KV substation, managed by the Ibadan Electricity Distribution Company.
Abeokuta 330/132 KV substation.
Ayede 330/132 KV substation.
Sokoto 132/33 KV substation.
“These 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 minister added.
He also announced a second approval for the acquisition of an office complex for the Nigeria Electricity Liability Management Company.
“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.”
Adelabu emphasized the urgency of the approval, noting that commercial terms agreed upon during the recent visit of the German President were set to expire by December 28. He said the decision ensures Nigeria does not risk missing the deadline.
Reflecting on the project’s timeline, the minister explained that while the original agreement was signed in 2018-2019, it faced delays due to the COVID-19 pandemic and the subsequent political transition.
However, the new administration has prioritized its implementation to tackle Nigeria’s electricity challenges.
He described the pilot phase as a “proof of concept,” which has demonstrated the project’s potential to significantly boost power transmission across the country.
