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Nigeria signs six-year deal with Siemens to boost electricity supply

23 Jul 2019, 03:30 pm
Financial Nigeria
Nigeria signs six-year deal with Siemens to boost electricity supply

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The deal is expected to increase Nigeria’s grid capacity to 25,000 megawatts by 2025.

Power transmission line

The Federal Government of Nigeria and Siemens, a leading German industrial manufacturer, have signed an Electricity Road Map agreement, which is expected to increase Nigeria’s grid capacity to 25,000 megawatts by 2025. The six-year deal was signed by Alex Okoh, Director-General of the Bureau of Public Enterprises (BPE), and Joe Kaeser, CEO of Siemens, on behalf of both parties.

According to reports, the agreement is the product of a meeting President Muhammadu Buhari held with the German Chancellor, Angela Merkel, on August 31, 2018.

Speaking after the signing ceremony on Monday in Abuja, President Buhari said: “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 11,000MW by 2023 in the first and second phase of this deal, respectively.”

He added that the third phase of the agreement will strive to increase the overall grid capacity to 25,000 MW after the transmission and distribution bottlenecks have been fixed.

According to Kaeser, the signing of the agreement marked a milestone in the relationship between Nigeria and Germany. “The journey to this landmark [agreement] started in 2018 when the German Chancellor and the Nigerian President met to talk about the opportunities on how to strengthen our populations,” Kaeser said. “Energy was top on the agenda of what the two leaders discussed; and without affordable, reliable and sustainable energy supply, Nigeria cannot achieve sustainable economic development. This agreement and support from the German government will help Nigeria meet this challenge.”

President Buhari also expressed optimism that the long-term power generation capacity would ensure adequate energy mix and sustainability in the appropriate balance between urban and rural electrification.

“This administration’s priority was to stabilise power generation and the gas supply sector through the Payment Assurance Facility. This led to a peak power supply of 5,222MW,” President Buhari said. “Nonetheless, the constraints have been the transmission and distribution systems. Now, we have an excellent opportunity to address this challenge.”

The president also noted that the deal “will not be the solution to all our problems in the power sector. But I am confident that it has the potential to address a significant amount of challenges we have faced for decades.”


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