THUR, MAY 28 2020-theG&BJournal- The Federal Government says that the ultimate goal of the Nigeria Presidential Power Initiative (PPI) is to modernise and increase the Nigerian electricity grid capacity from 5 GW currently to 25GW, over three phases.
‘’It will deliver improved power supply nationwide, with attendant results in job creation, investor confidence, cost and ease of doing business and economic growth. It will provide training and capacity building for thousands of young Nigerians (non-graduates, students and graduates), create economic opportunities for Nigerian engineering companies that will serve as local vendors for the provision of manpower and equipment and will stimulate and encourage inflow of additional investment into the power sector.’’
President Muhammadu Buhari recently approved the release of funding for the first phase of Phase 1 of the PPI, to kick start the pre-engineering and concession financing workstreams.
According to a statement by the presidency, 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 Federal Government will on-lend as a convertible loan to the other shareholders in the DisCos.
The President also directed the Ministry of Power, Ministry of 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 PPI.
The PPI is a power infrastructure upgrade and modernization programme agreed to by the Nigerian Government and Siemens AG of Germany, with the support of the German Government. Under the PPI, Nigeria will on behalf of the other shareholders in the Electricity Distribution Companies invest in infrastructure upgrades in the form of improved payment systems, distribution substations, transformers, protection devices, smart meters, transmission line lines etc.
The Federal Government said that all DisCos have, directly, and through the BPE, been diligently carried along over the last 15 months to understand in details the challenges in the electricity system.
‘’All items to be purchased were provided by the DisCos and the Transmission Company of Nigeria (TCN) and they will be vetted by a professional Project Management Office,’’ according to the Presidency.
To ensure fairness and transparency of the intervention, the President also directed that the Federal Government engage the International Finance Corporation (IFC) to assist in developing the commercial structure of the intervention under the PPI, as well as in undertaking an independent company valuation of the DisCos.
President Buhari also directed that to ensure the value for money and preserve the integrity and transparency of the procurement process under the government-to-government framework, Siemens AG shall be solely responsible for nominating the EPC partners to perform all onshore works,- emphasizing that there will be no middleman.
‘’Our goal is simply to deliver electricity to Nigerian businesses and homes,’’ President Buhari said.
The PPI initiative was born when the German Chancellor Angela Merkel visited Nigeria on August 31, 2018 and met with President Buhari. The German Chancellor came along with a business delegation that included the Global CEO of Siemens. Nigeria and Germany agreed to explore cooperation in a number of areas, including power.
|twitter:@theGBJournal|email: info@govandbusinessjournal.com.ng|
