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Siemens electricity deal: FG to release N8.6b counterpart fund

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THE Federal Government has the president’s anticipatory approval for the release of N8, 648,081,465.2 towards the counterpart funding for the power deal signed by Siemens AG, Nigerian and German governments.

  The fund is made up of €15.21 million (N6,940,081,465.20) and N1.708 billion onshore components.

  Briefing State House correspondents after the 10th virtual Federal Executive Council (FEC) meeting presided over by President Muhammadu Buhari, Federal Minister of Finance, Budget and National Planning, Zainab Ahmed, said that the memo seeking the ratification was jointly presented with her Ministry of Power counterpart, Saleh Mamman.

  According to her, the money is for the counterpart funding for the bilateral credit facility from German Consortium guaranteed by the German government through Euler Hermes to finance the implementation of the end to end grid modernization and expansion programme of the project.

  “So today, we discussed stage one of phase one of this project under presidential power initiative. This project is designed to include 23 transmission initiatives as well as 175 separate transformative projects in the electricity distribution franchises that we have in the country. The project will also support the regulator, Nigerian Electricity Regulatory Commission (NERC), to transition towards a programme of improving metering in the electricity industry in the country.

Let me remind us as citizens that Mr President and his German counterpart met in Abuja in 31st August, 2018, and committed to jointly increase the capacity of the Nigerian electricity grid from the current capacity of 5,000 megawatts to 25,000 megawatts over a three-phased programme. After this meeting, an MOU was executed on the 23rd of July, 2019 between the Nigerian Government and the Siemens AG with the German Government support.

The MOU is designed to deliver this end to end modernisation programme which we are calling the presidential power initiative. The objective of this presidential power initiative is to address the intractable problems that have bedeviled the Nigerian power industry, over a period of years. The project will be implemented in three phases and the subject of our memo today is phase one.

The facility for this programme is to be sourced from the German consortium and it would be guaranteed by the German government through Euler Hermes covering 85 per cent of the project cost, the highly concessional facility with two to three years moratorium, 12 years loan repayment period with an interest rate of LIBOR plus one per cent to LIBOR plus 1.2 per cent. And also the Federal Government is to provide 15 per cent counterpart funding as its contribution towards the project,” she said.

  Ahmed added that the amount is for the first phase of the three-phase project designed to include 23 transmission initiatives as well as 175 separate transformative projects.

  Equally, FEC yesterday approved the ratification of an air transport agreement between Nigeria and the United States of America.

  Federal Minister of Information and Culture, Lai Mohammed explained that the bilateral air transport agreement is to strengthen economic, social and cultural ties between Nigeria and the USA.

  “The Aviation Minister presented a memo today (Wednesday) on the approval for ratification of the air transport agreement between the Federal Government of Nigeria and the United States of America. The minister sought council’s approval for ratification of the air transport agreement between USA and Nigeria. You will recall that both United States and Nigeria are parties to the Chicago Convention on the 7th of December, 1994.

Article 6 of the convention actually urges parties to sign air services agreement with member states to improve social, political and economic ties. The US has ratified its own and Mr. President and council graciously accepted today to also ratify this agreement. So, today, Mr. President signed valid agreement of Air transport service between Nigeria and the US with the attendant benefits for both countries, especially as Nigeria is working towards having its own full national airline. So, we will now take advantage of this air transport bilateral agreement to strengthen economic, social and cultural ties between the two countries,” he said.

  Also briefing newsmen, Minister of Environment, Mohammed Mahmoud, said FEC approved a new National Forest Policy to protect the nation’s forests and create more jobs.

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