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Nigeria-Siemens 25,000mw Electricity Deal To Gulp Over N1.15tn

The six-year electricity deal signed by the Federal Government and Germany-based Siemens AG in July will cost more than N1.15 trillion to execute, ’Femi Asu reports

The three-phase Nigerian electrification project which aims to achieve 25,000 megawatts of electricity in the country by 2025 will require more than N1.15 trillion to execute, according to the Technical and Commercial Proposal seen by our correspondent.

On July 22, 2019, the Federal Government and Siemens signed a Letter of Agreement on the Nigeria Electrification Roadmap which resulted from the meeting between President Muhammadu Buhari and the German Chancellor, Angela Merkel, on August 31, 2018 in Abuja.

President Buhari said at the signing ceremony that it was evident that more work needed to be done to upgrade the transmission and distribution system, adding that the government was initially reluctant to intervene as the distribution sector had already been privatised.

According to the Technical and Commercial Proposal dated May 7, 2019, phase 1 of the project seeks to increase power delivered by additional 2,000MW, significantly reduce Aggregate Technical, Commercial and Collection losses and achieve improved grid stability and reliability.

The document revealed that the scope of work for the first phase would entail transmission assets upgrade, distribution assets upgrade, grid automation, national metering infrastructure, power system simulation and general technical training.

The budgetary price for the transmission assets upgrade, which includes 11 containerised substations and 10 mobile substations, was put at €330 million (about N113.42 billion).

The cost of the distribution assets upgrade was estimated at €250m (N85.92 billion). The upgrade would include products and systems for 14 stations and upgrade of 26 substations.

According to the document, the power system simulation would entail new software licences for the Transmission Company of Nigeria (€192,000); software M&S for TCN (€182,000); training and technical services support for TCN (€1.35 million); new software licences for 11 distribution companies (€1.41 million); software M&S for Discos (€848,000) and training and technical services support for Discos (€1.81 million).

The cost of system development studies for 25,000MW transmission, sub-transmission and distribution grid capacity was put at €1 million.

The budgetary prices for the grid automation, national metering infrastructure and the general technical training were not stated.

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