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Power projects: FG set to pay N8.64bn counterpart fund

Power projects: FG set to pay N8.64bn counterpart fund

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The Federal Executive Council, FEC, yesterday approved the payment of €15.21m (N6,940,081,465.20) offshore and N1.71bn onshore as part of Nigeria’s counterpart funding for the power deal with Siemens AG, signed by the Nigerian and German governments in 2019. The total amount approved is N8,648,081,465.2.
This was one of the decisions taken at the virtual FEC meeting presided over by President Muhammadu Buhari.
Mrs. Zainab Ahmed, Minister of Finance, Budget and National Planning, who briefed State House correspondents at the end of the meeting, said that FEC ratified the President’s anticipatory approval for the fund.
She added that the Council also ratified the air transport agreement between Nigeria and the United States based on a memorandum she jointly presented with the Minister of Power, Saleh Mamman.
In July 2019, Nigeria and Siemens signed a Letter of Agreement on the Nigeria Electrification Road Map after the President and the German Chancellor, Angela Merkel, met on August 31, 2018, in Abuja.
The project would support the regulator, Nigerian Electricity Regulatory Commission, towards improving metering in the electricity industry in the country. “Mr President and his German counterpart met in Abuja on August 31, 2018 and committed to jointly increase the capacity of Nigeria’s electricity grid from current capacity of 5,000MW to 25,000MW over a three-phased programme,” she said.
Siemens in a statement yesterday said that Nigeria had approved the pre-engineering contract to enable the firm to commence work on the expansion of the country’s electricity transmission and distribution network as well as generation capacity.
Ahmed said the facility for the programme would be sourced from the German consortium and it would be guaranteed by the German government through Euler Hermes covering 85 per cent of the project cost, with two to three-year moratorium, and 12-year repayment period.
She added: “The Federal Government is taking the loan from the German government with the plan to on-lend this particular loan to the distributing networks.
“So, it’s a convertible loan facility to the DISCOs and we will be working with the DISCOs to restructure an appropriate loan agreement as soon as we are able to close out on this initial phase of the process. Council approved and ratified Mr. President’s approval.”
Also, Alhaji Lai Mohammed, Minister of Information and Culture, said that Nigeria would take advantage of the air agreement with US to strengthen economic, social and cultural ties between the two countries.
“The Aviation Minister presented a memo today (Wednesday) on the approval for ratification of the air transport agreement between the Federal Government of Nigeria and the United States of America.
“So, today, Mr President signed valid agreement of Air transport service between Nigeria and the US with the attendant benefits for both countries, especially as Nigeria is working towards having its own full national airline.”
On his part, Mohammed Mahmoud, Minister of Environment, said FEC also approved the nation’s revised National Forest Policy to replace the old one formulated in 2006.

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About Demola Abimboye