The federal government is developing investment framework to channel private funding into the expansion and stabilization of the national grid, as part of efforts to ensure stable and adequate electricity supply.
Minister of Power, Chief Adebayo Adelabu, in an exclusive interview yesterday, said that the government has started developing terms and guidelines that will serve as the framework for private sector’s participation in the transmission system, reports The Nation.
According to him, the framework is being built on a win-win model, allowing the government to secure ample funding for the national grid, while ensuring investors have opportunity to recover their investments and competitive returns.
He said: “Some investors have indicated interest in building transmission lines, but we are working on putting a proper framework in place that would allow the private investor to recover cost. This is now the next step to create a framework that would allow private investors to recover costs on a commercial basis.
“We have commissioned studies to invite private investors. So lastly, we are discussing establishing frameworks for private sector participation in investment in the national grid. The end of this year is here.
“We have various offers from private investors. National grid is owned 100 per cent by government. But I can tell you, with other ministries competing for funds, we cannot fund the national grid alone.
“It is an expanded national grid. If you look at the grid, it is too large, and there are some dedicated lines which some private investors have expressed interest”.
Adelabu, in a statement by his Special Adviser on Strategic Communications and Media, Bolaji Tunji, also yesterday highlighted several milestones that have been recorded under the Presidential Power Initiative (PPI).
He said several interventions by the President Bola Tinubu-led administration have helped to further galvanise the PPI project, known as Siemens deal.
According to him, the Tinubu government has added fillip to the Siemens Power Project as an accelerated contract was signed to ensure visible progress in the project.
He said: “The Presidential Power Initiative was conceived in August 2018, born from the strong bilateral relationship between Nigeria and Germany, with the goal of transforming Nigeria’s power sector by increasing generation, transmission, and distribution capacity. This administration, under the leadership of President Tinubu, has demonstrated an unwavering commitment to the PPI, recognising its critical importance to opening up the economy and galvanising national development.
“To ensure the expeditious delivery of improved power supply to industrial clusters, households, and businesses, President Tinubu mandated the signing of an Acceleration Agreement. This commitment has translated into tangible results. Under the present administration, leadership, strengthened programme governance has expedited contract and financing approvals, leading to faster project implementation”.
He outlined some of the milestones under the present administration apart from the execution of an Acceleration Agreement with Siemens Energy to fast-track the implementation of the PPI, include the approval of a new technical direction for the PPI, ensuring Siemens Energy focuses solely on upgrading and modernizing the transmission subsector through a Turnkey approach while the President also approved that the distribution scope be delivered by other reputable Engineering Procurement and Construction (EPC) Companies with the requisite technical, financial, and financing capacity.
He pointed out that these strategic decisions were aimed at increasing grid capacity by an additional 4,000MW by the end of 2026, with an aspirational target of an additional 2,000MW, as directed by the Economic Management Team in 2024.
Said he: ”Noteworthy is the fact that the implementation of the PPI commenced with the installation and commissioning of 10 power transformers and 10 mobile substations across the country under the pilot phase of the PPI, which was manufactured and delivered in October 2023. In 2024, there was a focus on the implementation of the pilot project and the project initiation activities of the main phase of the PPI.
“Also under the administration, FGN Power Company implemented several transmission projects across the country, which have collectively increased the transmission wheeling capacity by over 700MW for industrial clusters, businesses, universities, and homes”.
