…..Directs Fashola, Finance ministers, BPE To Seal Siemens Deal

President Muhammadu Buhari has directed the Ministries of Power, Hon. Babatunde Fashola, and the Finance Minister, the Bureau of Public Enterprise (BPE) to conclude the nation’s engagement with Siemens AG over the regular power supply in the Country.

The directive, which was shared via the Presidency’s Twitter handle on Wednesday, was to start the pre-engineering & concessionary financing aspects of the Presidential Power Initiative (PPI).
PPI is a power infrastructure upgrade and modernization Programme agreed to by the Federal Government and Siemens AG of Germany, with the support of the German Government. The ultimate goal of the initiative, according to the government, is to modernize and increase the Nigerian electricity grid capacity from about 5 GW currently to 25 GW, over three phases.

How it works: Under the PPI, Nigeria on behalf of the other shareholders in the Electricity Distribution Companies (DisCos) invest in infrastructure upgrades in the form of improved payment systems, distribution substations, transformers, protection devices, smart meters, and transmission lines among others.
In a statement shared via Tweeter, the President explained that all DisCos have, directly, and through the BPE, been diligently carried along over the last 15 months to understand in detail the challenges in the electricity systems.

Funding: The funding for the PPI will be secured under concessionary terms (up to 3-year moratorium and 12-year repayment at concessionary interest rates) through the German Euler Hermes cover, which Nigeria will on-lend as a convertible loan to the other shareholders in the DisCos.
According to the statement, President Buhari has approved the release of funding for the first part of Phase 1 of the PPI, to kick-off the pre-engineering and concession financing workstreams.