Nigeria, Siemens sign electricity agreement to generate 11,000MW by 2023

President Muhammadu Buhari on Monday witnessed the signing of Electricity Road Map agreement between the Federal Government of Nigeria and German-based Siemens at the State House, Abuja.

The News Agency of Nigeria (NAN) reports that the agreement is the outcome of a meeting Buhari held with German Chancellor, Angela Merkel on August 31, 2018.

The Letter of Agreement was signed on behalf of the Federal Government by the Director-General of the Bureau of Public Enterprises (BPE), Alex Okoh, and the Global Chief Executive Officer of Siemens, Joe Kaeser.

Speaking shortly after signing of the agreement, Mr Buhari tasked Siemens and other stakeholders in the power sector to work hard to achieve 7,000 megawatts of reliable power supply by 2021, and 11,000 megawatts by 2023.

“We all know how critical electricity is to the development of any community or indeed any nation.

“And in Nigeria, 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, industrialisation and poverty alleviation,” he said.

According to him, 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.

The president expressed the hope that with the federal government’s strong commitment to the development of Mambilla Hydroelectric and the various solar projects under development across the country, the long-term power generation capacity would ensure adequate energy mix.

He further said that it would ensure sustainability in the appropriate balance between urban and rural electrification.

The president recalled that the previous administrations had made futile attempts in the past to fix the nation’s energy problem.

He, however, expressed the hope that the opportunity from Germany through Siemens was a good one that could provide the needed solution.

“Now, we have an excellent opportunity to address this challenge. This Government’s priority was to stabilise 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.

“While 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.

Mr Buhari, therefore, stressed that the agreement would be structured strictly under a government to government framework, adding that no middlemen would be involved in order to achieve its goals.

“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.

“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.

“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.’’