Buhari approves and releases N41.6 billion grant for Presidential Power Program
The The President, Major General Muhammadu Buhari (Retired) has approved and released $100 million (41.6 billion Naira at the official exchange rate of 415.63 Naira/$) as a subscription grant to the presidential initiative for power, it was collected on Friday. .
It was also learned that the $100 million was part of the $200 million approved by the president for the program, as the balance along with the others would come at a later date.
The PPI is a federal government initiative conceived during a meeting between the Nigerian President and German Chancellor Angela Merkel on August 31, 2018.
It was designed as a three-phase initiative to rehabilitate and expand Nigeria’s power grid through improved generation, transmission and distribution.
The federal government had to create a special purpose vehicle, the FGN Power Company, to own and run the PPI.
A document obtained from the Abuja company on the financing of the electricity program indicated that billions of naira had already been released for the initiative.
It read in part: “FGN Power Company has already received the sum of $100 million out of $200 million from the Ministry of Finance, as approved by the President, being the start-up grant for the implementation of the PPI.
“The balance of $100 million plus the additional funding required for the 15% matching funding which is expected to be made available to FGN Power Company pursuant to Federal Executive Council approval in July 2020.
“Funding for the offshore will come from German banks at a prime rate, which will be guaranteed by Euler Hermes (German Export Credit Agency).”
He added: “The loan from the German banks will finance 85% of the cost of the offshore project, while the 15% counterpart funding will be provided by the Ministry of Finance through the FGN Power Company.
The document further stated that the federal government had committed to make a huge up-front investment under the PPI in the form of a convertible loan on behalf of the electricity distribution companies, given their inability to secure the investments needed to upgrading and modernizing their networks.
“The FGN Power Company will subsequently pass on the cost of the project to the Discos and Transmission Company of Nigeria, with reimbursement coming from the beneficiaries’ market revenues,” the report said.
Sunday punch had exclusively reported last week that the total funding requirement for the first phase of the Presidential Power Initiative was 2.3 billion euros (991.99 billion naira at the official exchange rate of 431.3 naira / €), as the fund would be deployed to reorganize the country. electricity sector.
The Nigerian power grid has been characterized by frequent blackouts in recent times, plunging the country into darkness on several occasions.
The national power grid has collapsed about five times this year, twice in March and twice in April, before recording another collapse earlier this month (June).
To avoid this and increase national electricity production above the persistent average of 3,500 megawatts, the government, in partnership with Germany, proposed the PPI.
“The PPI is a government-to-government initiative, Nigeria and the German government. It is being rolled out in phases and we are now in the first phase, to increase power generation to 7,000 MW,” Energy Minister Aliyu Abubakar said recently in Abuja.
He added: “We are taking over the transmission and distribution parts in the first phase. The distribution part is therefore involved. We have a lot of transformers in it. The transformers are more than 2,800 which must be deployed throughout the country.
In the FGN Power Company document, it is stated that the PPI will modernize and modernize power transmission and distribution infrastructure across the country by 2025.
“By investing billions of dollars in network infrastructure, data systems and skilled operators, the PPI will improve electricity supply and drive economic growth,” he said.
The company added: “During Phase I, the PPI will focus on ‘quick win’ measures to increase end-to-end operational capacity to 7 GW (seven gigawatts). By the end of the PPI, the network will reach a capacity of 25 GW, thus quadrupling the current capacity.