Federal Executive Council (FEC) at its meeting on Wednesday has approved release of the counterpart funding for the Petroleum Power Initiative (PPI)/Siemens Project.
With the latest approval, Phase 1 of the PPI will formally kick off. It includes projects in transmission, distribution, metering,simulation & training.
According to the Presidency, “This Phase 1 focused on “quick-win” measures to increase end-to-end operational capacity of Nigeria’s electricity grid to 7 GW. Transmission projects proposed under Phase 1 include 132/33 kV Mobile Substations; 132/33 kV(60 MVA) Transformers, and Containerized GIS Substations.”
The funding structure of the PPI also involves;
-85% from a consortium of banks, guaranteed by the German government through credit insurance firm, Euler Hermes.
-15 % Nigerian government counterpart funding.
-2–3 years moratorium.
-10–12 years repayment, at concessionary interest rates.
Nigerian companies will also be involved in the deal in the areas of: Site Surveys & Soil Investigation, Civil Works, Supply of Smart Meters, Data Center Hosting, Power System Modelling.
Buhari had previously revealed that the private sector will handle the entire contract involved in the project.
The project will be implemented in three phases and is to be completed by 2025. Nigeria estimates its on-grid transmission capacity to reach 25,000 megawatts.
Nigeria has an installed capacity of 13,000 megawatts, from which only a daily average of 3,500 megawatts is distributed to consumers due to a poor transmission and distribution network.