The federal government of Nigeria has signed a deal with German company, Siemens Ag, in its bid to find a lasting solution to electricity problems to perennial power challenges in the country.
President Muhammadu Buhari on Monday, July 22, met with the Joe Kaeser, Siemens AG’s president.
The meeting is in furtherance of the partnership between Nigeria and Germany to help the West African country with its electricity needs.
The meeting is a result of an earlier meeting President Buhari held with German Chancellor, Angela Merkel on August 31, 2018.
“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,” President Buhari told his guest at the meeting.
Read President Buhari’s full speech at the historic meeting:
Thank you all for coming today and for the roles you have all played in planning what we hope will be a significant project to dramatically improve the quality of our electricity supply.
2. 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.
3. 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.
4. 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.
5. Ladies and gentlemen, there have been many attempts at solving the electricity problem in our country. Previous governments have explored state-funded solutions through the ill-prepared National Independent Power Projects. They also explored the installation of large emergency power projects. There was also the partial privatisation of the power generation and distribution sectors.
6. These various interventions to solving the electricity problem have yielded an imbalance between the amount of power generated and the amount available for consumers. Despite over 13,000 megawatts of power generation capacity, only an average of 4,000 megawatts reliably reaches consumers.
7. Now, we have an excellent opportunity to address this challenge.
8. 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.
9. 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.
10. 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.
11. 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.
12. 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.
13. 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.
14. With our strong commitment to the development of Mambilla Hydroelectric and the various solar projects under development across the country, the long-term power generation capacity will ensure adequate energy mix and sustainability in the appropriate balance between urban and rural electrification.
15. Our intention is to ensure that our cooperation is structured under a Government-to-Government framework. No middlemen will be involved, so that we can achieve value for money for Nigerians. We also insist that all products be manufactured to high quality German and European standards and competitively priced.
16. This project will not be the solution to ALL our problems in the power sector. However, I am confident that it has the potential to address a significant amount of the challenges we have faced for decades.
17. Ladies and gentlemen, it is our hope that as the power situation improves, we will improve investor confidence, create jobs, reduce the cost of doing business and encourage more economic growth in Nigeria.
18. I thank you for coming today, particularly those of you who have had to come from outside Nigeria. I wish you all safe stay in Abuja and safe journeys back home.
19. God bless the Federal Republic of Nigeria.
Meanwhile, it has been reported that the Transmission Company of Nigeria announced that the national grid had been restored following its collapse that led to widespread power outage across states.
The power generation rose to 5,090 megawatts (MW) following the restoration of the collapsed grid.
The managing director of TCN, Usman Gur Mohammed, said the company had procured 250MW spinning reserve to cushion future system disturbance and had “written to the Nigerian Electricity Regulatory Commission (NERC) to quickly approve the implementation.”
In a related development, the NERC has said as from August 2019, electricity customers will be allowed to get prepaid meters and pay later.
The disclosure was made on Thursday, July 18, by NERC’s commissioner for finance and management services, Nathan Shatti.
Shatti said that the customers can either pay upfront or in instalments within a period of one to 10 years.