The electricity deal between the Federal Government and German-based Siemens AG will play a key role in repositioning the Nigerian power sector, a top executive at Eko Electricity Distribution Company, has said.
The Federal Government and Siemens signed an implementation agreement on July 26 for the Nigeria Electrification Roadmap, aimed at resolving the existing challenges in the power sector and expanding the capacity for future power needs.
A Director at EKEDC, Mr George Etomi, said the deal would benefit every stakeholder in the power industry.
According to a statement, Etomi spoke during an interview on CNBC Africa’s ‘Beyond Markets.’
He noted that the deal came on the heels of several consultations by President Muhammadu Buhari with German Chancellor, Angela Merkel, when she visited Nigeria last year.
Etomi said, “Consultation started October last year when the Presidency was visited. The German govt agreed to do it through an export credit facility.”
According to him, the power sector is facing a lot of challenges including the presence of antiquated transmission cables, lack of cost-reflective tariff, and inadequate distribution capacity.
Etomi said, ‘’Currently, installed capacity in Discos generates 6,000-7,000MW but the level that is being distributed is 3,000-4000 megawatts. However, our target is to get a consistent value of 5,000MW.
“We also need to have better injection substations and feeders to aid the distribution of power.”
He added, “We need an upward review of tariffs, and this is what we want the market regulators to understand. We explained to Siemens and they actually did explain to regulators.”
According to Etomi, the electricity distribution companies have what it takes to drive Nigeria’s power generation but there are huge costs to be incurred.
Source: The Punch