In respect to the $2.5 billion loan secured recently by the Federal Government of Nigeria from the World Bank, for the purpose of stable power supply, the Nigerian Government has given a breakdown of the contract it has with Siemens and how they intend to achieve their aim.
Condemnation trailed the government’s move to add more to the already existing $81.27 billion Nigeria’s debt. The fury mainly stems from the fact that about $20 billion has been spent so far on power generation and there is nothing to show for it.
With the cases of embezzlement associated with electricity fund in the past, Nigerians are concerned that there is no guarantee that the newly accessed loan will prove different. Therefore, it beckons on the Federal Government to explain how the funds will be utilized to effect constant power supply.
On Monday, the presidency issued a statement giving a breakdown of the Electrification Roadmap that necessitated the loan.
“The Nigerian Electrification Roadmap (NER) is a set of critical upgrade interventions in the transmission and distribution segments of the power sector, developed by the Nigerian Government in partnership with Siemens, to increase operational grid capacity to 11,000 MW over the next few years.
The Implementation Agreement for the Roadmap was signed by Nigerian Government and Siemens on July 22, 2019, in a ceremony presided by the president. Here is an unfolding timeline of the transformational Roadmap.
August 31, 2018; Chancellor Angela Merkel visited Nigeria and met with president Buhari. She brought along with her a business delegation that included the Global CEO of Siemens, Mr. Joe Kaeser. Nigeria and Germany agree to explore cooperation in a number of areas including power.
In October 16 and 17, 2018, Siemens and Nigerian Ministries, Departments and Agencies (MDAs) held a joint workshop, at which Siemens presented a draft proposal. In November 18, 2018, Siemens formally submitted an Expression of Interest and proposal for a Nigerian Electrification Roadmap (NER), outlining a plan to tackle Nigeria’s historical Transmission and Distribution challenges.
In January 8 to 11, 2019, Siemens and BPE, on behalf of the Nigerian Government, undertook site visit to all DisCos. This provided an opportunity to formally engage with DisCos and present to them the draft Roadmap. In March 19 to 22, 2019: A 3-day workshop bringing together Siemens and Nigerian Government’s MDAs, to collate necessary input, validate project assumptions, and identify projects to be included in the first phase of the planned Roadmap.
In March 25 to April 30, 2019: Review and revalidation by Siemens of lists of priority projects previously submitted by TCN Nigeria and the DisCos. In May 1 to June 26, 2019: Siemens engaged further with representatives of TCN, NERC, BPE, Ministry of Power and all the DisCos to review technical and commercial considerations for the project, culminating in the submission of revised Technical and Commercial proposal to Nigerian Government. In July 22, 2019: Signing of Roadmap Implementation Agreement between Siemens and Nigeria.
Finalizing project costing, training needs and analysis, negotiations, with a view to financial close shortly. The NER comprises several individual brownfield and greenfield transmission and distribution upgrade and expansion projects that will be executed by Siemens and other project partners. These include but are not limited to the following:
- Transmission Projects: Supply and installation of Transmission Substations, Mobile substations, Transformers, Compensation Systems, and Overhead Transmission Lines.
- Distribution Projects: Upgrade/Expansion of existing Distribution Substations, Supply and installation of power distribution products and systems. Installation and commissioning of mobile substations, and power Distribution Lines.
- Power System Simulation and Studies: Software licenses and associated services for TCN and Discos. Training and Technical Services for TCN and Discos.
- Control and Protection Devices: Supply of Control and Protection devices for TCN and Discos.
- Meter Data Management Systems: Deployment of national Meter Data Management Infrastructure (hardware, Software, Services).
- Technical Training: Extensive Training and Technical support for TCN, DisCos and other relevant power sector agencies.
- Impact of the Nigeria Electrification Roadmap (NER)
- Will deliver improved power supply nationwide, with attendant results in job creation, investor confidence, cost and ease of doing business and economic growth.
- Will provide training and capacity building for thousands of young Nigerians (non-graduates, students and graduates)
- Will create economic opportunities for Nigerian engineering companies that will serve as local vendors for the provision of manpower and equipment.
- Will stimulate/encourage inflow of additional investment into the power sector.
- Will open up financing opportunities that can be taken up by local banks and investors.”
The summary of the breakdown is that the borrowed funds will be utilized judiciously to the effect of constant power supply. And to achieve that, president Buhari reiterated that the process will involve no middle men.
“Our goal is simply to deliver electricity to Nigerian businesses and homes. Our intention is to ensure that our cooperation is structured under a Govt-to-Govt framework. No middlemen will be involved, so that we can achieve value for money for Nigerians.” He concluded.