The Federal Executive Council has approved payment of €15.21m and N1.708 billion towards the counterpart funding for the Presidential Power Initiative, PPI, a power upgrade and modernization program between the Nigerian government and Siemens AG of Germany.
The Minister of Finance, Budget and National Planning, Zainab Ahmed, disclosed this to journalist after a virtual meeting with the council presided over by President Muhammadu Buhari on Wednesday.
The €15.21 million which translates to about N6.940 billion is for offshore deals while N1.708 billion is set aside for onshore deals.
According to the Presidency, the Council’s approval is a ratification of the President earlier approval, and his directive to the Ministry of Finance as well as the Ministry of Power.
Ahmed explained that the first phase of the project is designed to include 23 transmission initiatives as well as 175 separate transformative projects in the electricity distribution franchise.
According to her, the project would also support the regulator, Nigerian Electricity Regulatory Commission, towards improving metering in the electricity industry in the country.
She said, “Mr President and his German counterpart met in Abuja on August 31, 2018, and committed to jointly increase the capacity of Nigeria’s electricity grid from the current capacity of 5,000MW to 25,000MW over a three-phased programme.
“After this meeting, an MOU was executed on July 23, 2019, between the Nigerian government and Siemens AG with the German government support.”The Federal Government is taking the loan from the German government with the plan to on-lend this particular loan to the distributing network.
“So, it’s a convertible loan facility to the DISCOs and we will be working with the DISCOs to restructure an appropriate loan agreement as soon as we are able to close out on this initial phase of the process. Council approved and ratified Mr. President’s approval.”
Earlier the President had directed the Ministries of Power and 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 Presidential Power Initiative.
The PPI journey started on August 31, 2018, when Chancellor Angela Merkel visited Nigeria and met with President Buhari.
The project amongst other benefits will deliver improved power supply nationwide, with attendant results in job creation, investor confidence, cost and ease of doing business and economic growth.
The Presidency noted that the ultimate goal of the PPI is to modernize and increase the Nigerian electricity grid capacity from about 5 Gigawatt, GW, currently to 25 GW, over three phases.