President Muhammadu Buhari has granted approval to the concessionary funding and provision of technical support to the country’s power sector by a German firm, Siemens AG.

Infinity Tyres

According to the official Twitter handle of the Presidency, @NGRPresident, Buhari had already instructed the Ministry of Finance, Budget and National Planning, the Ministry of Power and the Bureau of Public Enterprises “to conclude the engagement with Siemens AG to commence the pre-engineering and concessionary financing aspects of the Presidential Power Initiative.”

The PPI, which transited from the Nigerian Electrification Road Map, first muted in 2018, aims to upgrade power infrastructure in the country as part of efforts to halt frequent blackouts.

“All items to be purchased were provided by the distribution companies and Transmission Company of Nigeria and they will be vetted by a professional project management office,” the Presidency stated.

It revealed that the concessionary terms included a three-year moratorium and a “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.”

The Presidency added, “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 system.

READ ALSO: Petrol price to increase as Brent Crude stabilises at $35

“The PPI is a power infrastructure upgrade and modernisation programme agreed to by Nigerian government and Siemens AG of Germany, with the support of the German Government.

“Under the PPI, Nigerian government will on behalf of the other shareholders in the Discos invest in infrastructure upgrades in the form of improved payment systems, distribution substations, transformers, protection devices, smart meters, transmission lines, etc.

“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.”