TheCable

The federal executive council has approved the payment of €15.21 million and N1.708 billion as counterpart funding for the Presidential Power Initiative, a power upgrade and modernization programme between the Nigerian government and Siemens with the support of the German government.

In May, President Muhammadu Buhari had approved the release of funds for the first phase of the Siemens electricity deal.

The Federal Executive Council today approved payment of €15.21m and N1.708 billion towards the counterpart funding for the Presidential Power Initiative, a power upgrade and modernization program between @NigeriaGov and Siemens AG of Germany, with the support of the German Govt.

— Presidency Nigeria (@NGRPresident) July 29, 2020

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In 2019, Nigeria signed a power project deal with Siemens AG, Germany-based firm, to deliver 7,000 megawatts (MW) of electricity to the national grid by 2021.

According to Zainab Ahmed, the minister of finance, budget and national planning, the amount to be paid represents 15 percent of the total contract sum.

The other 85 percent will be provided by Euler Hermes Group and backed by the German government on concessionary terms.

The contract has a three-year moratorium with 12 years repayment period at an interest rate of Libor-plus one percent to Libor-plus 1.2 percent.

With this approval phase one of the PPI, which includes projects in transmission, distribution, metering, simulation and training, will formally kick-off.

“This phase one focused on quick-win measures to increase the end-to-end operational capacity of Nigeria’s electricity grid to 7GW. Transmission projects proposed under phase one include 132/33 kV mobile substations; 132/33 kV(60 MVA) transformers, and containerized GIS substations,” Tolu Ogunlesi, special assistant to the president on digital and new media, wrote on Wednesday.

The project is to be implemented in three phases to be completed by 2025.