President Buhari has approved the release of funds for the first phase of the Siemens electricity deal.
In 2019, the president had 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.
In a series of posts on the Twitter handle of the presidency on Wednesday, Buhari asked the ministry of power, finance and the Bureau of Public Enterprises (BPE) to finalise the engagement with the company for work to begin on the project.
He said the goal is to deliver electricity to Nigerian businesses and homes.
“President Buhari has directed the Ministries of Power and Finance, and the Bureau of Public Enterprise (BPE) to conclude the engagement with Siemens AG to commence the pre-engineering and concessionary financing aspects of the Presidential Power Initiative,” the presidency tweeted.
“The Presidential Power Initiative (PPI) is a power infrastructure upgrade and modernization Programme agreed to by Nigerian government and Siemens AG of Germany, with the support of the German Government.
“Under the PPI, the Nigerian government will on behalf of the other shareholders in the Electricity Distribution Cos. invest in infrastructure upgrades in the form of improved payment systems, distribution substations, transformers, protection devices, smart meters, transmission lines, etc.
“The funding for the PPI will be secured under concessionary terms (up to 3-year moratorium and 12-year repayment at concessionary interest rates) through the German Euler Hermes cover, which the Nigeria government will on-lend as a convertible loan to the other shareholders in the DisCos.
“President Buhari has approved the release of funding for the first part of Phase 1 of the PPI, to kick-off the pre-engineering and concession financing workstreams.”
The president added that the ultimate goal of the PPI is to modernise and increase the country’s electricity grid capacity from about 5 to 25 gigawatts (GW) over three phases.