Nigeria to Pay Siemens Over N1.15trn for 25,000MW

  • Nigeria to Pay Siemens Over N1.15trn for 25,000MW

The new electrification project signed by the Federal Government and Siemens AG will cost Nigeria more than N1.15 trillion, the project Technical and Commercial Proposal has shown.

The Federal Government had signed a three-phase project with the Germany-based Siemens on July 22, 2019 after President Muhammadu Buhari and the German Chancellor Angela Merkel met on August 31, 2018 in Abuja.

According to the document, “the potential projects are 1,350MW in Abuja; 1,350MW, Kaduna; 1,350MW in Kano, and 450MW in Lagos (Agura).

“The budgetary cost of the Abuja, Kaduna and Kano projects was put at an average of €700/kW, while that of Lagos was €600/kW, amounting to about €3.11bn ( N1.07tn).

“These above prices are subject to changes based on additional information on the specific projects, location, financing and contractual terms and conditions,” the document said.

However, the additional projects such as “Independent Power Producer projects would be required to close the capacity gap to 25,000MW.”

“The quantity and prices are all ex-work factory and are subject to change after detailed project scoping and design. Budget prices contained here exclude the following: i. Taxes, duties and other logistics costs ii. Project management costs iii. Costs of rights of way, Environmental and Social Impact Assessment, Environmental Impact Assessment, and other required licences or permits,” the document said.

Speaking on the project, President Buhari said the size of the project showed the level of work that needs to be done order to upgrade the transmission and distribution system, adding that he was initially reluctant because of the distribution sector had been privatised.

“Siemens proposes a gas processing facility for 300 million standard cubic feet per day from existing flare gas assets for the generation of about 1,200MW of electricity within 36-48 months,” the document stated.

“Siemens is happy to support the power plant projects, particularly to speed up this process to build new power capacity in northern region and Lagos area of Nigeria.”

About the Author

Samed Olukoya
CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and, with over a decade long experience in the global financial market. Contact Samed on Twitter: @sameolukoya

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