Abuja — The Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, says the Federal Government’s power deal with Germany’s Siemens AG will support the regulator, Nigerian Electricity Regulatory Commission, NERC, towards improving metering in the electricity industry in the country.
The minister made the disclosure while speaking with journalists on the outcome of the recent Federal Executive Council, FEC, virtual meeting which approved part payment of €15.21 million (N6,940,081,465.20) (offshore) and N1.708 billion (onshore) for the power deal with Siemens.
Ahmed said the council discussed the first phase of the project, which she said, was designed to include 23 transmission initiatives as well as 175 separate transformative projects in the electricity distribution franchise.
She stated that the Siemens deal, which was signed by the Nigerian and German governments in 2019, would also support the regulator (NERC) towards improving metering in the electricity industry in the country.
“Mr President and his German counterpart met in Abuja on August 31, 2018, and committed to jointly increase the capacity of Nigeria’s electricity grid from the current capacity of 5,000MW to 25,000MW over a three-phased programme.
“After this meeting, an MOU was executed on July 23, 2019, between the Nigerian government and Siemens AG with the German government support.
“The MOU is designed to deliver this end-to-end modernisation programme which we are calling the presidential power initiative. The objective of this initiative is to address the intractable problems that have bedevilled the Nigerian power industry over a period of years.
“The project will be implemented in three phases and the subject of our memo today is phase one,” the minister said.
According to her, the facility for the programme would be sourced from the German consortium and it would be guaranteed by the German government through Euler Hermes covering 85 percent of the project cost, with two to three years moratorium, 12 years loan repayment period.
“We have a provision in the 2020 revised appropriation for the government’s counterpart funding.
“The Federal Government is taking the loan from the German government with the plan to on-lend this particular loan to the distributing network. So, it’s a convertible loan facility to the Discos (power distribution companies) and we will be working with the Discos to restructure an appropriate loan agreement as soon as we are able to close out on this initial phase of the process. Council approved and ratified Mr. President’s approval,” the minister asserted.