Nigeria’s Federal Executive Council (FEC) has approved the award of an engineering, procurement, construction and financing (EPC&F) contract for the construction and upgrade of substations under phase 1 of the Presidential Power Initiative (PPI).

The council gave the go-ahead for the deal at a meeting held in December 2024, according to Nigeria's power minister Adebayo Adelabu. The minister said the €161.3 million (US$167.6 million) contract covers the first batch of phase 1 and includes work on substations at Onitsha, Offa, Abeokuta, Ayede and Sokoto.

The PPI is an initiative being undertaken by the Nigerian government in collaboration with the government of Germany and German firm Siemens Energy. The programme seeks to increase Nigeria’s generation capacity from the current 5.3GW to 25GW in three phases, electrifying over 25 million households.

The PPI is being overseen by FGN Power Company (FGNPC), a special purpose vehicle established by the government to secure financing, coordinate stakeholders and enter into commercial and contractual arrangements for the programme’s implementation, with Siemens Energy serving as the technical partner.

Overall, phase 1 includes the upgrade of 14 substations and construction of 21 substations across the country and is set to kick off in the first quarter of 2025, with completion set for 2027. It has a total investment cost of €2.3 billion and will focus on critical and quick-win interventions through an estimated 200 projects to increase the national grid’s operational capacity to 7GW. In all, the phase targets the provision of 7.3 million new electricity connections.

In late July 2024, FGNPC signed a US$118.2 million EPC&F contract with Egypt’s Elsewedy and Power China for the construction and rehabilitation of 2,670km of 33kV, 11kV, and 400V distribution lines under phase 1. The work involves building 687km of new lines and revamping 1,983km of existing lines across the country in areas including those covered by the Enugu and Benin distribution firms. The project is designed to complement ongoing midstream transmission projects to secure power delivery to residential, commercial and industrial clusters.

FGN Power Company (FGNPC) signs a major Engineering, Procurement, Construction, and Financing (EPC&F) contract with Elsewedy and Power China for the rehabilitation and construction of distribution lines under Phase I of the Presidential Power Initiative (PPI). pic.twitter.com/6J4QdLQYFy

— FGN Power Company (@fgnpcppi) July 31, 2024

In October 2023, FGNPC inked a memorandum of understanding (MoU) with a Chinese consortium of China Civil Engineering Construction (CCECC) and TBEA Energy for the upgrade of distribution lines under Lot 3 of phase 1, which encompasses the regions served by the Jos, Kano, Abuja and Kaduna distribution companies. The investment cost is pegged at US$463 million and is to be financed by the Export-Import Bank of China.

According to FGNPC managing director Kenny Anuwe, the upgrade of distribution lines is a crucial component of the PPI as the primary capacity constraints lie within the distribution sub-sector. Addressing this issue alone will result in the release of at least 2GW within the distribution companies covered by Lot 3, Anuwe said.

Phase 2 of the PPI will address bottlenecks in the distribution networks and enable maximum use of existing generation and distribution networks. It is expected to grow the grid’s operational capacity to 11GW.

Phase 3 will look to attain a total operational grid capacity of 25GW through further expansion of the generation, transmission and distribution systems.

The PPI also has a pilot phase, which is ongoing and involves the deployment of 10 transformers and 10 mobile substations across various strategic locations in Nigeria, supplied by Siemens Energy. So far, the phase has seen the commissioning of eight transformers and five mobile substations, increasing the national grid's transmission capacity by 821.6MW. In total, the pilot phase is planned to grow transmission capacity by about 1.3GW.

The PPI, formerly known as the Nigeria Electrification Roadmap Initiative, was finalised by the Nigerian and German governments in August 2018. The Nigerian authorities signed the implementation agreement with Siemens Energy in July 2019. The programme is being financed by the German authorities and the Nigerian government, which is also seeking funding from development finance institutions. 

Top photo: Mobile substation under Nigeria's Presidential Power Initiative (Source: Facebook @ FGNPC)