Nigeria Kicks Off Power Sector Revamp Agreement With Siemens

LAGOS (Capital Markets in Africa) — Nigeria President Muhammadu Buhari has kicked off the next phase of a deal with Siemens AG to upgrade the nation’s dilapidated power infrastructure.

The government of Africa’s largest economy and the German engineering firm signed an agreement last July to rehabilitate and then expand the country’s electricity grid. Only about 60% of residents have access to power and even those who do are plagued by regular blackouts.

Buhari 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.

Nigeria has more than 13,000 megawatts of installed electricity generation capacity but only 7,500 megawatts of that is available and less than 4,000 megawatts is dispatched to the grid each day. The partnership with Siemens will modernize the existing network before enlarging it until the country can produce and distribute 25,000 megawatts.

The project will be financed by concessionary loans covered by Euler Hermes Group SAS, a large provider of credit insurance, the statement said. 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, it said.

Source: Bloomberg Business News