President Buhari sets target for electricity sector, says 11, 000 mgw achievable by 2023; Implementation agreement for Electrification Roadmap signed; How the deal was struck

President Muhammadu Buhari, Monday in Abuja, challenged stakeholders in the electricity sector to improve supply to Nigerians, urging them to reach 7, 000 megawatts by 2021, and work towards 11, 000 megawatts by 2023, while ensuring better distribution to businesses and homes.

The President, who witnessed an agreement signing ceremony with Siemens AG at the State House, said the priority of his administration remains to buoy the economy, starting with more improved supply of power that will create enabling environment for businesses to thrive.

“Our goal is simply to deliver electricity to Nigerian businesses and homes. My challenge to Siemens, our partner investors in the Distribution Companies, the Transmission Company of Nigeria and the Electricity Regulator is to work hard to achieve 7,000 megawatts of reliable power supply by 2021 and 11,000 megawatts by 2023 – in phases 1 and 2 respectively.

“After these transmission and distribution system bottlenecks have been fixed, we will seek – in the third and final phase – to drive generation capacity and overall grid capacity to 25,000 megawatts.

“With our strong commitment to the development of Mambilla Hydroelectric and the various solar projects under development across the country, the long-term power generation capacity will ensure adequate energy mix and sustainability in the appropriate balance between urban and rural electrification,’’ he said.

President Buhari told the management team of Siemens led by the Chief Executive Officer, Mr Joe Kaeser, that electricity remains critical to the development of Nigeria, noting that the country was blessed with significant natural gas, hydro and solar resources for power generation that could be utilized to achieve reliable, affordable and quality electricity supply necessary for economic growth, industrialization and poverty alleviation.

“I recall my meeting in late August, last year, with Chancellor Merkel here in Abuja, when both our Governments committed to future cooperation to support economic growth and development in Nigeria. We were clear that fixing the power sector was a key priority for this administration.

“It was during that event that, CEO of Siemens AG, Mr Joe Kaeser, committed to working with Nigeria to develop a feasible roadmap to modernise our electricity grid with support from the German Government,’’ he added.

The President said previous governments had explored state funded solutions through the National Independent Power Projects, and also explored the installation of large emergency power projects.

“There was also the partial privatization of the power generation and distribution sectors. These various interventions to solving the electricity problem have yielded an imbalance between the amount of power generated and the amount available for consumers.

“Despite over 13,000 megawatts of power generation capacity, only an average of 4,000 megawatts reliably reaches consumers. Now, we have an excellent opportunity to address this challenge. This Government’s priority was to stabilise the power generation and gas supply sector through the Payment Assurance Facility, which led to a peak power supply of 5,222 MW,’’ he noted.

President Buhari said the constraints remained at the transmission and distribution systems, adding that he had directed a team to ask Siemens and Nigerian stakeholders to first focus on fixing the transmission and distribution infrastructure, especially around economic centres where jobs were created.

In his remarks, the Chief Executive Officer of Siemens AG said the company would work hard to improve the electricity situation in Nigeria as the country’s economy will only achieve sustainable development with adequate power supply.

Mr Kaeser said he would personally supervise the “Implementation Agreement for the Nigerian Electrification Road map’’, which also involves the German government.

REMARKS BY H.E PRESIDENT MUHAMMADU BUHARI AT THE MEETING WITH MR JOE KAESER, CEO/PRESIDENT SIEMENS AG AT THE STATE HOUSE ON MONDAY 22ND JULY 2019

1. Thank you all for coming today and for the roles you have all played in planning what we hope will be a significant project to dramatically improve the quality of our electricity supply.
2. I recall my meeting in late August, last year, with Chancellor Merkel here in Abuja, when both our Governments committed to future cooperation to support economic growth and development in Nigeria. We were clear that fixing the power sector was a key priority for this administration.
3. It was during that event that Mr Joe Kaeser, CEO of Siemens AG committed to working with Nigeria to develop a feasible roadmap to modernise our electricity grid with support from the German Government.
4. We all know how critical electricity is to the development of any community or indeed any nation. And in Nigeria, whilst we are blessed to have significant natural gas, hydro and solar resources for power generation, we are still on the journey to achieving reliable, affordable and quality electricity supply necessary for economic growth, industrialization and poverty alleviation.
5. Ladies and Gentlemen, there have been many attempts at solving the electricity problem in our country. Previous Governments have explored State funded solutions through the ill prepared National Independent Power Projects. They also explored the installation of large emergency power projects. There was also the partial privatization of the power generation and distribution sectors.
6. These various interventions to solving the electricity problem have yielded an imbalance between the amount of power generated and the amount available for consumers. Despite over 13,000 megawatts of power generation capacity, only an average of 4,000 megawatts reliably reaches consumers.
7. Now, we have an excellent opportunity to address this challenge.
8. This Government’s priority was to stabilise the power generation and gas supply sector through the Payment Assurance Facility, which led to a peak power supply of 5,222 MW. Nonetheless, the constraints remained at the transmission and distribution systems.
9. This is why I directed my team to ask Siemens and our Nigerian stakeholders to first focus on fixing the transmission and distribution infrastructure – especially around economic centres where jobs are created.
10. Whilst it was evident that more needed to be done to upgrade the sub-transmission and distribution system, our Government was initially reluctant to intervene as the distribution sector is already privatised.
11. I am therefore very pleased with the positive feedback from private sector owners of the distribution companies, who have all endorsed Government’s intervention to engage Siemens on this end-to-end plan to modernise the electricity grid.
12. Our goal is simply to deliver electricity to Nigerian businesses and homes. My challenge to Siemens, our partner investors in the Distribution Companies, the Transmission Company of Nigeria and the Electricity Regulator is to work hard to achieve 7,000 megawatts of reliable power supply by 2021 and 11,000 megawatts by 2023 – in phases 1 and 2 respectively.
13. After these transmission and distribution system bottlenecks have been fixed, we will seek – in the third and final phase – to drive generation capacity and overall grid capacity to 25,000 megawatts.
14. With our strong commitment to the development of Mambilla Hydroelectric and the various solar projects under development across the country, the long-term power generation capacity will ensure adequate energy mix and sustainability in the appropriate balance between urban and rural electrification.
15. Our intention is to ensure that our cooperation is structured under a Government-to-Government framework. No middlemen will be involved, so that we can achieve value for money for Nigerians. We also insist that all products be manufactured to high quality German and European standards and competitively priced.
16. This project will not be the solution to ALL our problems in the power sector. However, I am confident that it has the potential to address a significant amount of the challenges we have faced for decades.
17. Ladies and Gentlemen, it is our hope that as the power situation improves, we will improve investor confidence, create jobs, reduce the cost of doing business and encourage more economic growth in Nigeria.
18. I thank you for coming today, particularly those of you who have had to come from outside Nigeria. I wish you all safe stay in Abuja and safe journeys back home.
19. God bless the Federal Republic of Nigeria.