FG to release $100m to Siemens to further power sector rehabilitation

By Habeeb Adamu

The Federal Government of Nigeria will soon release $100 million to Siemens to carry on with the necessary rehabilitation works in the power sector.

This is coming on the basis of an agreement between the government and the National Assembly on the compelling need to improve the power supply situation in the country. The agreement would enable Siemens to strengthen the necessary infrastructure that would raise the country’s power generation to 7,000 megawatts (MW) under the Presidential Power Initiative.

Gabriel Suswan, chairman, Senate Committee on Power, who disclosed this Wednesday at the Nigeria Oil and Gas Conference in Abuja, said Siemens AG’s accomplishment of a similar plan in Egypt gives hope that the Nigeria Electricity Roadmap (NER) is possible and achievable.

The Siemens Power Project under the Presidential Power Initiative is aimed at increasing Nigeria’s electricity from the current 4,500 MW to 25,000 MW, but this will come in phases. The phases cover the upgrading and expansion of the Transmission Networks (TN) and Distribution Companies (DisCos) networks, improvement of access to affordable, efficient and reliable electricity, and providing support for industrial and economic growth in the country.

In Nigeria, the imbalance between power generation, evacuation, dispatch and consumption is a major challenge for the population of over 200 million people. While over 13 GW of grid power generation capacity is installed, only approximately 3.4 GW reaches consumers on average.

Siemens was introduced to assess the situation in Nigeria’s power sector, alongside other stakeholders from Nigeria’s Ministry of Power, Bureau of Public Enterprise (BPE), (NERC), Transmission Company of Nigeria (TCN) and DisCos, with an immediate priority to enhance the transmission and distribution segment of the power sector.

“Given Siemens AG’s accomplishment of a similar plan in Egypt and also its reputation as an international giant in the power sector related engagements, it is strongly believed that the Nigeria Electricity Roadmap (NER) is possible and achievable,” Suswan said.

He said the new Electricity Act that is expected to be passed in two weeks is intended to address the multi-layered problems besetting the power sector, adding that all the legislations concerning the power sector have been consolidated into one document.

“Once the integration of the National Electricity Project becomes law, it would be looked into every three years so that whatever anomalies that are observed are corrected,” he said.

He said the power sector was unbundled without setting milestones for the operators, but with the integrated Electricity Strategic Project in place, this would not happen again.

On the role of Nigeria Electricity Regulatory Commission (NERC) in the new Act, he said the commission has been strengthened with its power widened.

NERC is supposed to be autonomous, but it is currently not, and this has affected its ability to carry out its functions.

Suswam said there are currently so many interferences in the functions of NERC by the powers that be, which should not be so.

“It should be like the Central Bank of Nigeria with full autonomy to operate. It does not have the capacity to act appropriately. But now, in the new law it has been given the latitude,” he said.

The senator stated that a good portion of the new legislation has been devoted to renewables, unlike the current legislation that did not have a space for it.

Each state of the federation or anybody that has the ability to generate and distribute even 1 MW of electricity would be allowed to do so with the new legislation, he said.