The Federal Executive Council (FEC) has approved a contract worth ₦134.75 billion (€161.33 million) for the first phase of the Presidential Power Initiative (PPI), also known as the Siemens Project. This initiative aims to upgrade and expand critical power infrastructure in Nigeria to improve electricity transmission. Minister of Power, Adebayo Adelabu, announced the approval during a briefing with State House correspondents on Monday at the Presidential Villa in Abuja. He stated that this marks a significant advancement following the successful completion of the pilot phase of the project.
The approved contract includes the engineering, procurement, construction, and financing of 330/132KV and 132/33KV substations in Onitsha, Offa, Abeokuta, Ayede, and Sokoto. Adelabu explained, “There were two approvals for the Federal Ministry of Power.
The first was for the contract award to implement the upgrade of 14 existing (‘brownfield’) substations and the construction of 21 new (‘greenfield’) substations under Phase I of the Presidential Power Initiative, commonly referred to as the Siemens Project.” He added, “The first batch of this Phase I project includes the Onitsha 330/132KV substation under the Enugu Electricity Distribution Company, the Offa 132/33KV substation under the Ibadan Electricity Distribution Company, a new Abeokuta 330/132KV substation, the Ayede 330/132KV substation, and the Sokoto 132/33KV substation. These projects are designed to stabilize and improve the transmission segment of Nigeria’s power sector.” The Siemens Project is part of a long-term plan to inject 12,000 megawatts (MW) of electricity into Nigeria’s national grid. The agreement for the project was originally signed between Nigeria and Germany in 2018 during former President Muhammadu Buhari’s administration but faced delays due to the COVID-19 pandemic and transitional changes.
On December 1, 2023, President Bola Tinubu and German Chancellor Olaf Scholz renewed the agreement during the United Nations Climate Change Summit (COP28) in Dubai. The updated deal was signed by Kenny Anuwe, Managing Director of the Federal Government of Nigeria Power Company, and Nadja Haakansson, Managing Director of Siemens Africa. Adelabu highlighted the urgency of Monday’s approval, noting that the commercial terms agreed upon during the German Chancellor’s visit are set to expire on December 28, 2023. He stated, “This decision ensures that we do not miss the deadline, demonstrating our commitment to resolving Nigeria’s power challenges.”
The FEC also approved ₦1.7 billion for the outright purchase of an office complex for the Nigeria Electricity Liability Management Company (NELMCO). Adelabu explained that the office, located in Wuse 1, Abuja, will replace the company’s current rented space, avoiding escalating rental costs and providing a stable base for the company to expand its operations and meet its mandate.
NELMCO, established under the Electricity Power Sector Reform Act of 2005, plays a vital role in managing liabilities and obligations stemming from the privatization of Nigeria’s power sector. Adelabu clarified that the current phase of the Siemens Project is not the first. The pilot phase, completed earlier, demonstrated the initiative’s feasibility in addressing Nigeria’s long-standing energy crisis. Delays over the years were attributed to the pandemic and administrative transitions.
“This government is determined to fast-track the project to ensure it achieves its objectives of improving electricity supply and transforming Nigeria’s power sector,” the minister concluded.