Nigeria signs €18.94 mln “anticipatory approval” to kick start Siemens intervention in power sector
President Muhammadu Buhari has approved €18.94 million counterpart funding for a deal that will see Siemens AG upgrade the nation’s dilapidated power infrastructure.
Nigeria, Africa’s most populous nation, last year contracted the German engineering company to rehabilitate and expand its electricity grid.
Only about two-thirds of Nigerians have access to power and even those are plagued by constant blackouts as both the distribution companies and generation companies are performing below expectations since the privatisation of the sector by the last administration.
The president granted “anticipatory approval” for €18.94 million, or 15 percent of the cost, as counterpart funding for the project, Finance Minister Zainab Ahmed said.
The balance of 85 percent will be provided by Euler Hermes Group SAS, and backed by the German government, on concessionary terms with a three-year moratorium, a 12-year repayment period at “an interest rate of Libor-plus 1 percent to Libor-plus 1.2 percent.”
The project will be implemented in three phases to be completed by 2025 when Nigeria estimates its on-grid transmission capacity would reach 25,000 megawatts. The West African nation has an installed capacity of 13,000 megawatts, from which only a daily average of 3,500 megawatts is dispatched to consumers due to a poor transmission and distribution network.
“With the First phase of The Presidential Power Initiative about to kick off, the Nigerian Power Sector is about to witness unprecedented positive development.
“We look forward to giving Nigerians stable and affordable electricity supply,” Minister of Power, Sale Mamman wrote on his twitter handle on Wednesday.
-With Bloomberg report