Siemen’s $2.3billion power project back on track
The $2.3 billion Siemens power agreement between Nigeria and Germany which had remained largely dormant has come back to life under the President Bola Tinubu’s administration, it was gathered at
The $2.3 billion Siemens power agreement between Nigeria and Germany which had remained largely dormant has come back to life under the President Bola Tinubu’s administration, it was gathered at the weekend.
Germany’s Deputy Head of Mission in Nigeria, Johannes Lehne, gave indication to the development at the Sub-Saharan Africa International Petroleum Exhibition and Conference (SAIPEC) in Lagos. According to him, the bilateral partnership had stalled before gaining renewed traction under the current government.
“The strange thing was that this partnership was dormant until the beginning of President Tinubu’s time, where actually we revived this,” Lehne said, adding that the Presidential Power Initiative (PPI) aims to reactivate Nigeria’s transmission system and expand electricity access.
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The Siemens power initiative, an arrangement between both the Nigerian and German governments, was conceived under former President Muhammadu Buhari, and designed to modernise Nigeria’s power transmission and distribution infrastructure.
Under the initiative, Siemens set phased capacity targets of 7,000 megawatts (Mw), rising to 11,000 Mw and ultimately 25,000 Mw, a significant increase from the country’s 4,000 Mw supply.
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Recall that in 2023, Minister of Power Bayo Adelabu, had said the federal government would review the agreement. He blamed the state of the scheme then on “economic and regulatory conditions” since the contract was signed.
He attributed delays to the COVID-19 pandemic, political transition and sector reforms. However, a pilot phase progressed, involving the importation of 10 mobile substations and 10 transformers expected to raise transmission capacity by about 1,300 MW once fully installed.
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According to the German envoy, Germany has expanded energy cooperation with Nigeria through an Energy Support Programme, drawing on Berlin’s experience in diversifying supply and scaling renewables such as solar, wind and geothermal.
He argued that many countries are undergoing “energy addition” rather than a full transition away from fossil fuels, noting that gas will remain a key industrial feedstock in Germany for decades.
Lehne disclosed that arising from the Russia-Ukraine conflict, Germany diversified its energy imports and rapidly built liquefied natural gas terminals. Lehne said Berlin is open to sourcing gas from Nigeria as part of its long-term energy security strategy. “It is not clever to put all your eggs in one basket,” he said.
Presently, Nigerian is vastly rich in gas, as the country holds about 210.54 trillion cubic feet of proven gas reserves, with potential resources estimated at up to 650 TCF. But notwithstanding this volume, gas production stands at about 7.5 billion cubic feet per day- a paltry amount compared to her reserve which has shut the country out of top global producers, and by extension, denying her of good revenue earnings.
“We rank number one in Africa in terms of reserves, but we are not number one in production,” said the Deputy Director, Gas Utilisation, Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Jennis Anyanwu, said. He added that Nigeria’s primary challenge is converting vast reserves into economic value.
