FG Begins Phase 2 Of 12,000MW Siemens Power Project

The Federal Government has commenced Phase Two of the Siemens power project, a flagship initiative under the Presidential Power Initiative, designed to overhaul Nigeria’s electricity transmission system and ultimately inject 12,000 megawatts of power into the national grid.

The project stems from an agreement signed on December 1, 2023, between the Governments of Nigeria and Germany, which laid the foundation for a partnership aimed at ending years of chronic instability in the power sector.

Confirming the development, the Media Adviser to the Minister of Power, Mr Bolaji Tunji, told The PUNCH on Sunday that work under the second phase had officially begun following the successful conclusion of financing arrangements with Siemens Energy.

“Phase 2 of the Siemens projects is now underway, following the successful finalisation of financing,” Tunji said. “This phase will deliver seven upgraded existing power lines and ten new ones, covering 544 kilometres and capable of carrying 7,140 megawatts of power.”

He explained that the upgrades were a critical component of the PPI, which aims to raise transmission capacity in stages to achieve the long-term target of 12,000MW agreed under the bilateral pact.

The media aide emphasised that the groundwork for the project had already been laid through the delivery of key equipment during the pilot stage.

The Minister of Power, Adebayo Adelabu, had informed the National Assembly earlier this year that the project would commence within the first three months of 2025.

The media aide also underscored the milestones recorded during the first and pilot phase, highlighting key achievements that demonstrated the project’s potential for wider impact and sustainability.

He said, “FGN Power Company, the special purpose vehicle for the PPI, successfully received 10 power transformers and 10 mobile substations from Siemens Energy under the pilot stage. This is to significantly improve the nation’s transmission capacity by over 1,300MW,” Tunji explained, noting that installation was at an advanced stage. “Installation is over 80 per cent completed, hence the beginning of Phase 2.”

He added that the equipment had been strategically deployed across the country to strengthen weak points in the grid and reduce the frequency of system collapses.

“These critical assets have been strategically deployed at key sites nationwide, such as Okene, Amukpe, Potiskum, Apo, Ihovbor, Birnin Kebbi, Ajah, Nike Lake, Kwanar Dangora, Maryland, Omouaran, Ojo, Saapade, University of Ibadan, Federal University of Technology Owerri, and Eleyele in Ibadan.”

On financing for the second phase, Tunji confirmed that Nigeria would contribute domestic funds alongside the international facility secured with Siemens.

“There would be counterpart funding from Nigeria,” he stated. “I do not have that figure immediately.”

He stressed that the Phase 2 projects were not only about kilometres of lines or megawatts of capacity but about addressing the longstanding frustrations of Nigerian households and businesses.

“These Phase 2 projects will significantly increase electricity reliability and accessibility for millions of Nigerians. The Federal Government is upgrading the transmission network through this project,” he said.

On December 1, 2023, the Governments of Nigeria and Germany signed the Presidential Power Initiative agreement to inject 12,000 MegaWatts of electricity into the national grid.

The signing was presided over by the leaders of both countries, President Bola Tinubu of Nigeria and German Chancellor Olaf Scholz, on the sidelines of the United Nations Climate Change Summit, COP28, in Dubai, the United Arab Emirates.

Managing Director of the Federal Government of Nigeria Power Company, Kenny Anuwe, and the Managing Director (Africa), Siemens AG, Nadja Haakansson, signed the agreement. However, the contracts date back to the tenure of former President Muhammadu Buhari in 2018.

The Director-General of the Bureau of Public Procurement, Adebowale Adedokun, earlier said the bureau negotiated a $115,000 savings on the Presidential Power Initiative, otherwise known as the Siemens project. Adebowale said the savings demonstrate the BPP’s role in safeguarding government interests through due diligence.

He said, “One of the things that we have done is to look at the Siemens project. We went through negotiation. We scrutinised the request and learned that the government has saved about $115,000 through a negotiation. So that is a plus already; in just two weeks, we went into deep review and negotiation, and they saw the benefit.

“That money would naturally have gone into that contract without anybody doing anything about it. But we have been able to say, ‘No, we are working for the interest of Nigeria. You must come down from your initial price based on our price intelligence. BPP is that fulcrum that can defend the government regarding how much a contract should be when we do our proper due diligence.”

The Federal Executive Council had earlier approved N262.75bn (€161.33) for the first Phase of the Siemens Project. The project involves the engineering, procurement, construction, and financing for 330/132 KV and 132/33 KV substations in Onitsha, Offa, Abeokuta, Ayede, and Sokoto.

Following the approval by the FEC, the Minister of Power, Adebayo Adelabu, said Phase I of the Siemens project relates to the transmission, upgrade, and expansion, including 14 brownfield substations that need upgrade and revamping, and 21 Greenfield substations, which are new substations to be built across the country to improve the transmission segment.

“The first batch of this Phase I project includes Onitsha, 330/133 KV substation under the Enugu electricity distribution company; two, Offa 132/33 KV substation under the Ibadan electricity company.

“There is the new Abeokuta 330/132 KV substation. We have the Ayede 330/132 KV substation. And lastly, the Sokoto 132/33 KV substation. Those are the five substations to be worked upon under the first batch of Phase I of the Siemens project. And we expect that this will further improve and stabilise the transmission segment of the power sector value chain in the not-too-distant future on completion,” the power minister explained.

FG Begins Phase 2 Of 12,000MW Siemens Power Project - Politics - Nigeria