FG, Siemens signs six-year electricity deal, Buhari sets targets of 7,000MW targets by 2021

The federal government Monday signed electricity road map agreement with German-based Siemens to be executed in three phases from 2019 to 2025.The agreement, signed at the Presidential Villa in Abuja, is structured under a Government-to-Government framework, and it eliminates middlemen in order to achieve value for money for Nigerians. Director General of Bureau of Public Enterprises (BPE) Mr. Alex Okoh singed on behalf of Nigeria while the Chief Executive Officer of Siemens, Mr Joe Kaeser, signed on behalf of the company.

The deal is the product of a meeting between President Muhammadu Buhari and German Chancellor, Angela Merkel last year.Speaking at the signing of the agreement, the president said the agreement would help fix the power sector and enhance economic development in the country. 

“I recall my meeting in late August, last year, with Chancellor Merkel here in Abuja, when both our Governments committed to future cooperation to support economic growth and development in Nigeria. We were clear that fixing the power sector was a key priority for this administration.“It was during that event that Mr Joe Kaeser, CEO of Siemens AG committed to working with Nigeria to develop a feasible roadmap to modernise our electricity grid with support from the German Government.“We all know how critical electricity is to the development of any community or indeed any nation. And in Nigeria, whilst we are blessed to have significant natural gas, hydro and solar resources for power generation, we are still on the journey to achieving reliable, affordable and quality electricity supply necessary for economic growth, industrialization and poverty alleviation,” he said.

The president said previous administrations have made futile attempts to fix the problem, but the opportunity from Germany through Siemens is a good one that can provide the needed solution.“Now, we have an excellent opportunity to address this challenge. This Government’s priority was to stabilise the power generation and gas supply sector through the Payment Assurance Facility, which led to a peak power supply of 5,222 MW. Nonetheless, the constraints remained at the transmission and distribution systems.“This is why I directed my team to ask Siemens and our Nigerian stakeholders to first focus on fixing the transmission and distribution infrastructure – especially around economic centres where jobs are created.“Whilst it was evident that more needed to be done to upgrade the sub-transmission and distribution system, our Government was initially reluctant to intervene as the distribution sector is already privatised,” he said.The President, who appreciated the contributions of the private sector, however gave distribution companies a target of between 7000 and 11,000 megawatts by 2023.“I am therefore very pleased with the positive feedback from private sector owners of the distribution companies, who have all endorsed Government’s intervention to engage Siemens on this end-to-end plan to modernise the electricity grid.“Our goal is simply to deliver electricity to Nigerian businesses and homes. My challenge to Siemens, our partner investors in the Distribution Companies, the Transmission Company of Nigeria and the Electricity Regulator is to work hard to achieve 7,000 megawatts of reliable power supply by 2021 and 11,000 megawatts by 2023 – in phases 1 and 2 respectively.“After these transmission and distribution system bottlenecks have been fixed, we will seek – in the third and final phase – to drive generation capacity and overall grid capacity to 25,000 megawatts,” he said.Also speaking, Chief Executive Officer of Siemens, Mr Joe Kaeser, said the signing of the agreement was a milestone in the relationship between Nigeria and Germany.“The journey to this landmark started in August 2018 when the German Chancellor and the Nigerian President met to talk about the opportunities on how to strengthen our populations.“The two leaders said energy was top on their agenda of what they discussed and clearly without affordable, reliable and sustainable energy in supply, Nigeria cannot be able to achieve sustainable economic development.“With this agreement and the support of the German government, Nigeria is stepping up to meet this challenge,” he said.

He thanked investors and stakeholders in the power sector for their support, stressing that the new partnership on the road map for power generation would aid the activities of the Transmission Company of Nigeria (TCN) and the eleven Distribution Companies in the country.

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