Buhari meets Joe Kaeser, signs power deal with Siemens AG

ABUJA, Nigeria – President Muhammadu Buhari today signed power deal with Siemens AG. The president signed the deal when he met with Chief Executive Officer of Siemens AG, Mr Joe Kaeser.

Siemens AG (Aktiengesellschaft) is a German multinational company with headquarters in Munich. It is the largest industrial manufacturing and power company in Europe with branch offices abroad with a combined revenue of €83.049 billion in 2018. Siemens AG is basically into power generation services, wind power and renewables.

Speaking at the occasion, President Buhari recalled that it was late August, last year, at a meeting with Chancellor Merkel here in Abuja, when both governments committed to future cooperation to support economic growth and development in Nigeria.

“We were clear that fixing the power sector was a key priority for this administration. “It was during that event that Mr Joe Kaeser, CEO of Siemens AG committed to working with Nigeria to develop a feasible roadmap to modernise our electricity grid with support from the German Government”, he said.

He explained that while Nigeria is blessed to have significant natural gas, hydro and solar resources for power generation, it is still on the journey to achieving reliable, affordable and quality electricity supply necessary for economic growth, industrialization and poverty alleviation.

He said that previous governments have explored state funded solutions through the ill prepared National Independent Power Projects.

“They also explored the installation of large emergency power projects. There was also the partial privatization of the power generation and distribution sectors. These various interventions to solving the electricity problem have yielded an imbalance between the amount of power generated and the amount available for consumers. Despite over 13,000 megawatts of power generation capacity, only an average of 4,000 megawatts reliably reaches consumers”, he said.

He noted that the priority of his government is to stabilise the power generation and gas supply sector through the Payment Assurance Facility, which led to a peak power supply of 5,222 MW but that constraints remained at the transmission and distribution systems.

“This is why I directed my team to ask Siemens and our Nigerian stakeholders to first focus on fixing the transmission and distribution infrastructure – especially around economic centres where jobs are created. Whilst it was evident that more needed to be done to upgrade the sub-transmission and distribution system, our Government was initially reluctant to intervene as the distribution sector is already privatised.

” I am therefore very pleased with the positive feedback from private sector owners of the distribution companies, who have all endorsed Government’s intervention to engage Siemens on this end-to-end plan to modernise the electricity grid”Acc, he said.

According to Buhari, the goal is simply to deliver electricity to Nigerian businesses and homes. My challenge to Siemens, our partner investors in the Distribution Companies, the Transmission Company of Nigeria and the Electricity Regulator is to work hard to achieve 7,000 megawatts of reliable power supply by 2021 and 11,000 megawatts by 2023 – in phases 1 and 2 respectively.

“After these transmission and distribution system bottlenecks have been fixed, we will seek – in the third and final phase – to drive generation capacity and overall grid capacity to 25,000 megawatts.

“With our strong commitment to the development of Mambilla Hydroelectric and the various solar projects under development across the country, the long-term power generation capacity will ensure adequate energy mix and sustainability in the appropriate balance between urban and rural electrification.

“Our intention is to ensure that our cooperation is structured under a Government-to-Government framework. No middlemen will be involved, so that we can achieve value for money for Nigerians. We also insist that all products be manufactured to high quality German and European standards and competitively priced”, he said.