PPI Set to Commence Phase 1 of Infrastructure Upgrades
By Mordi Chukwunonso
The Presidential Power Initiative (PPI), also known as the Siemens Project, will invest in infrastructure in the form of improved payment systems, distribution substations, transformers, protection devices, smart meters and transmission lines among others, on behalf of the other shareholders in Electricity Distribution Companies (DisCos).
President Muhammadu Buhari approved the release of funding, 15,21million euros and N1.708 billion, for the first phase of the PPI, to kick-off the pre-engineering and concession financing work streams, which Nigerian companies will take part in the site surveys & soil investigation Civil works, supply of smart meters, data center hosting and power system modelling. The approval was a sequel to the 2018 deal between Nigeria and Siemens AG of Germany following the agreement signed between the two parties.
This was disclosed by one of the media aides of President Muhammadu Buhari, Tolu Ogunlesi via his twitter handle. According to him, this Phase 1 of the PPI includes projects in transmission, distribution, metering, simulation and training.
‘’This phase 1 focused on ‘’quick-win’’ measures to increase the end-to-end operational capacity of Nigeria’s electricity grid to 7GW. Transmission projects proposed under Phase 1 include 132/33 kV Mobile Substations; 132/33 kV (60 MVA) transformers and containerized GIS Substations.
‘’There will be significant opportunities for local content on this project; for Nigerian companies to take part in the site surveys & soil investigation civil works, supply of smart meters, Data center hosting, power system modelling,’’ he added.
The minister of finance, budget and national planning, Mrs Zainab Ahmed also said the funding for the first phase of the project would be used to finance 23 transmission initiatives and 175 separate transformative projects. according to her, The funding for the PPI will be secured under concessionary terms (up to 3 years moratorium and 12 year repayment at concessionary interest rates) through the German Euler Hermes cover, which Nigeria will lend as a convertible loan to the other shareholders in the Discos and all Discos have, directly and through the BPE, been diligently carried along regarding the project. ‘’the project will be implemented in three phases and the federal government is to provide 15 percent counterpart funding as its contribution towards the project. We have a provision in the 2020 appropriation revised for the government’s counterpart funding.
‘’The federal government is taking the loan from the German government with the plan to unlend this particular loan to the distributing network. So it is a convertible loan facility to the Discos to restructure an appropriate loan agreement as soon as we are able to close out on this initial phase of the process and the council approved and ratified Mr President’s approval’’.
She added that ‘’the project would support the operations of the Nigerian electricity regulatory commission (NERC to transit towards a programme of improving metering in the electricity industry in the country’’.
Onyeche Tifase, Managing Director Siemens Nigeria, said the phase 2 will target the remaining network bottlenecks to enable full use of existing generation and distribution capacities, bringing the systems operational capacity to 11,000 MW. ‘’Phase 3 will develop the system up to 25,000 Mw in the long term. This includes upgrades and expansions in both generation, transmission and distribution’’
Siemens will begin pre-engineering works for the transmission, distribution and meter data management systems (MDMS) infrastructure across the country, to enable the development of a functional, efficient and reliable electricity grid system. Comprehensive studies and power system analysis software for the Nigerian utilities are also included. The goal of the presidential power initiative is to increase the operational capacity of the national grid in three phases to achieve a capacity of 25,000 MW in the long term from its current capacity of 5GW.