BUHARI ORDERS FINAL ENGAGEMENT WITH SIEMENS
President Mohammadu Buhari has directed the Ministry of Power, Ministry of Finance and the Bureau of Public Enterprise (BPE) to conclude the engagement with Siemens AG to commence the pre-engineering & concessionary financing aspects of the Presidential Power Initiative (PPI).
The Presidential Power Initiative (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.
According to the Federal Government, the ultimate goal of the Presidential Power Initiative is to modernize and increase the Nigerian electricity grid capacity from about 5 GW currently to 25 GW, over three phases.
Under the PPI, the Federal Government said that it will invest in infrastructure upgrades in the form of improved payment systems, distribution substations, transformers, protection devices, smart meters, and transmission lines.
According to the Federal Government, all items to be purchased were provided by the shareholders and Transmission Company of Nigeria, adding that they will be vetted by a professional Project Management Office.
It added that 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.
Meanwhile, President Muhammadu Buhari had 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.
To ensure fairness and transparency of the intervention, the President has also directed that the Federal Government engage the International Finance Corporation (‘IFC’) to assist in developing the commercial structure of the intervention under this Presidential Power Initiative (PPI).
The President also noted that to ensure value for money and preserve the integrity & transparency of the procurement process under the Government-to-Government framework.
He added that Siemens AG shall be solely responsible for nominating its EPC partners to perform all onshore works. He noted that no middlemen will be involved.
The PPI journey started on August 31, 2018, when Chancellor Angela Merkel visited Nigeria and met with President Buhari.
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