Nigeria President Muhammadu Buhari has asked and directed his Power and Finance Ministers to ‘commence the pre-engineering and concessionary financing aspects’ of the project with Siemens, according to a statement published on the Presidency’s Twitter page on Wednesday, kicking off the next phase of a deal with Siemens AG to upgrade the nations’ dilapidated power infrastructure.
The government of Africa’s largest economy and Siemens signed an agreement last July on the sidelines of a visit by the German Chancellor, Angela Merkel to rehabilitate and expand the country’s grid. Only 60% of residents have access to power and even those who do are plagued by regular blackouts.
The project is financed by concessionary loans covered by Euler Hermes Group SAS, a large provider of credit insurance.
Nigeria has more than 13,000 megawatts of installed electricity generation capacity but only 7,500 megawatts of that is available and less than 4000 megawatts are dispatched to the grid each day. The partnership with Siemens will modernize the existing network and enlarge it until the country can produce 25000 megawatts.
The government will ‘on-lend’ the funding to the shareholders of Nigeria’s power distribution companies and Siemens will have sole responsibility for selecting its contractors.