By Adedapo Adesanya
German engineering company, Siemens, has said the completion of Nigeria’s electricity improvement scheme set for a 2025 target has been pushed forward to 2030.
The Nigerian government under former President Muhammadu Buhari and Siemens in 2019 signed the deal, and in 2020, the Federal Executive Council (FEC) approved the payment of N8.6 billion to the company.
A breakdown of the money shows that the sum of N6.9 billion (€15.21 million) as offshore and N1.7 billion onshore components represent Nigeria’s counterpart funding for the power deal with Siemens AG.
Speaking on the new development, Mr Oladayo Orolu, the Head of Business Development and Government Relations at Siemens Energy, said in an interview that the three-phase project was set back by delays in starting the first phase.
“When we conceptualized this project in 2018, our plan was within two years we should be done with phase one, but then Covid happened disrupting supply chains, which meant getting raw materials took longer than before,” he said.
He also lamented that the delay will lead to cost overruns. In 2020, phase one was projected to cost about €2 billion.
“Prices are not at the same level they used to be. Some raw material components costs have been doubled, some are still close to where they used to be, some are just marginally higher,” he said.
Mr Orolu expects electricity output to increase by an additional 2,000 megawatts at the completion of phase one by 2025.
“The objective of phase one is to do quick fix projects that will free up 2,000 megawatts, we currently have 5000, we are looking at taking that to 7,000,” he said.
The partnership with Siemens will revamp Nigeria’s existing network before expanding it until the country can produce and distribute 25,000 megawatts.
Currently, Nigeria has a capacity of more than 13,000 megawatts, of which a daily average of about 3,400 megawatts is dispatched to consumers. The country is not able to fully utilise its power network due to poor transmission and distribution networks.
According to the World Bank, Nigeria has the largest energy access deficit as of 2021, with 43 per cent (or 85 million Nigerians) of the country’s population without access to grid-connected electricity.
Nigeria’s electric power consumption per capita of 145KwH falls behind those of select peers, South Africa (4,198KwH) and Ghana (351KwH), as well as the average for lower middle-income countries of 811KwH.