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Experts Faults Nigeria-German Power Agreement

Experts in the electricity power sector have express concern over the inability of the Federal government to explain how much will be the financial investment from the German company, Siemens in the agreement signed yesterday with the Federal government that will lead to the increase of the nation’s power capacity to 11,000 MW of electricity by the year 2023.

The managing Director, Leapack Energy Limited, Dr. Kevin Idowu said that what the Nigerian power sector needs right now is an off-shore investment in both the Transmission and Distribution sections of the power sector.

It is therefore expected that Nigerian government should lay more emphasis on foreign capital investment on both legs of the tripod power sector.  Idowu pointed out that  close to 7,000 MW can be generated by the  Gencos right now but the nation’s  Transmission and Distribution capacities cannot take that much.

The Executive Chairman Heitgrid Limited, Ifunnaya Ezeudo, noted that such agreements have been signed in the past by previous governments in Nigeria and not much has been achieved by those agreements. Adding that this should not be another Manitoba arrangement where foreign company was engaged to manage the nation’s power Transmission platform and nothing came out of such arrangement.

 The agreement which was witnessed by President Muhammadu Buhari  showed an electricity Road Map for Nigeria. The agreement is said to be an outcome of a meeting Buhari held with German Chancellor, Angela Merkel on Aug. 31, 2018,  to achieve 7,000 megawatts of reliable power supply by 2021, and 11,000 megawatts by 2023.

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

Speaking shortly after signing of the agreement, Buhari tasked Siemens and other stakeholders in the power sector to work hard.

“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.

“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.

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.’’

The Chief Executive Officer of Siemens, Mr. Joe Kaeser said the signing of the agreement was a milestone in the relationship between Nigeria and Germany.

“The journey to this landmark started in August 2018 when the German Chancellor and the Nigerian President met to talk about the opportunities on how to strengthen our populations.

“The two leaders said energy was top on their agenda of what they discussed and clearly without affordable, reliable and sustainable energy in supply, Nigeria cannot be able to achieve sustainable economic development.

“With this agreement and the support of the German government, Nigeria is stepping up to meet this challenge,” he said.

Kaeser also revealed that Egypt mega project was handled by Siemens, adding that the company had successfully managed to boost Egypt’s power generation capacity by more than 40 per cent by connecting 14.4 Gigawatts to the Egyptian national grid. ==Symb�0:��n

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