Nigeria’s President Bola Tinubu and German Chancellor Olaf Scholz on Friday presided over the further signing of the Presidential Power Initiative (PPI) agreement between their two countries. The agreement is designed to ultimately add 12,000MW of electricity to Nigeria’s national grid which currently produces an estimated 3,970MW.
The agreement was signed on the sidelines of the United Nations Climate Conference (COP28) taking place at The Expo City in Dubai.
Managing Director of Nigeria’s Power Holding Company, Kenny Anue, and the Managing Director (Africa), Siemens AG, Nadja Haakansson, signed on behalf of Nigeria and the German firm, respectively.
Commenting on the agreement, Anue spoke of the commitment of President Tinubu to the development of power infrastructure, noting that the President had reiterated time and again that infrastructure development is critical to the ongoing reforms in the country.
Anue further stressed that electricity and financing are at the heart of the economic reform agenda of the Tinubu administration, adding that the PPI, by design, encapsulates both elements with the support of partners, Siemens Energy and the financiers that are backed by the German government.
Also commenting on the project, Nigeria’s Minister of Power, Adebayo Adelabu, said, “This is an agreement that has to do with end-to-end fixing in terms of grid stabilisation of the entire transmission grid in the Nigerian power sector, which will eventually improve the power supply in terms of regularity, in terms of functionality, and in terms of affordability in the years to come.
“We’re very happy that we’re able to sign this agreement tonight. And in the next couple of months we will witness a lot of activities on the Presidential Power Initiatives project.”
He said the German government had nominated the mandated lead arrangers and financiers, adding that Siemens Energy had also successfully delivered 10 units of power transformers and 10 units of mobile substations which had been commissioned and are in the process of being installed.
He said the project agreement was for $2.3 billion.
The Minister revealed that the project is to be financed under the Government Export Credit Facility that is being provided by a couple of German banks to Nigeria.
These are apt comments indeed and they touch on the core of Nigeria’s economic competitiveness among nations as well as the capacity to create jobs, ability to attract foreign direct investments, quality of life and, indeed, all aspects of life.
The energy production level of any country dictates its pace of development and hence its poverty level, and this explains to a large extent the state of the Nigerian economy and poverty levels therein.
It is possible to alleviate poverty in developing countries through provision of energy, renewable or otherwise.
The World Bank reports that though about 55.4 per cent of Nigeria’s population is connected to the energy grid as at 2020, they are typically without power for about 85 per cent of the time and that power is almost nonexistent in certain areas. Over the past years, several off-grid power companies have emerged to try and bridge this gap.
Nigeria’s installed electricity capacity stands at 18,000MW while the country generates in the region of 3,970MW.
The Association of Nigerian Electricity Distributors (ANED), the umbrella body of Electricity Distribution Companies (DisCos), has estimated that Nigeria requires 30,000MW of electricity generation to meet current demand of electricity by consumers.
While the country targets to generate the said 30,000MW of electricity by 2030, it is reported to have the world’s largest energy access deficit, with over 90 million people lacking access to electricity, meaning that the country has one of the worst performing national grids in Africa. It is therefore the largest importer of petrol and diesel generators in sub-Saharan Africa (SSA). The country accounts for 3 million out of 6.5 million generators used in SSA and individuals and businesses spend $22 billion annually to fuel these generators.
Experts have recommended that renewable energy sources be harnessed to meet the country’s electricity shortfall, and effective policies be implemented that can provide solutions to the country’s socio–economic problems. The country’s renewable energy sources include wind, solar, biomass, hydro, and geothermal.
Whatever the case, Nigeria’s power challenges are lingering too long and the consequences are dire on the state of the economy, quality of life and reputation as an investment destination.
Given the country’s inherent potential and long lost respectable economic standing, it seems clear that the country can be salvaged from the doldrums and that the real challenge centres on the will, rather than the capacity to set things right. This at the end of the day defines responsible leadership. As such, Nigerians are looking up to the leadership to rise up to the challenge, for as is often said, where there’s a will, there’s a way.
