Determined to ensure that there is a complete overhaul of the transmission network in the country, the Federal Government has expanded the scope of work that Siemens Energy is suppose to do through the Presidential Power Initiative (PPI) by adding 22 more transmission substations to the work the German company is suppose to do.
Seun Suleiman, managing director and Chief Executive Officer, Siemens Energy Limited, disclosed this in an interview during the signing of an agreement which was presided over by Simbi Wabote, executive secretary of the Nigeria Content Development and Monitoring Board (NCDMB), at the Siemens Service Centre with Gil Automation in Port Harcourt. He said that the 22 transmission substations would be in addition to 11 new ones to be built under the Presidential Power Initiative.
Industry analysts have said that this government action is a demonstration of its believe and confidence in the ability of the company to deliver.
Seun Suleiman said that the pre-engineering phase of the project would be completed in 10 months as everyone involved in the project in the company, has stepped his game to ensure quick delivery of its own aspect of the deal.
He said the Presidential Power Initiative is going well. “We have five areas that we are working on the pre-engineering. Pre-engineering is to design before you go to execution. Phase 1, we are currently at 4,500MW, we want to go to 7,000MW. We are not adding any generation capacity but we want to make sure that we fix the dilapidated transmission and distribution networks because since those assets were acquired by Discos, nothing much had been done. So, that is phase one.
“Where are we right now? We are doing the pre-engineering. The pre-engineering for the distribution network of the country. We have already got a letter of credit from the Federal Government to start it. The design is done in our head office. The transmission we are already doing that. The transmission scope, we were given initially 11 sites; they have added 22 sites.
He said 11 sites were already agreed and the company would go ahead to get the LC, and it is currently making proposal for additional 11 sites. We are going to build new substations but they are the ones that have been built before that are in bad state, which are the brownfield.
According to him, there is another work scope called MDMS. Meter data management system. The MDMS is to ensure that the backend of all the meters, software-wise, is harmonised. So, the company is not here to sell meters but it will want to harmonise the software backend so that whichever meter provider that is plugged in the front side, there is uniformity. Discussions he said is ongoing on this. Then, we are also having discussions on what we call power network studies. We have been given the LC, and execution has started.
He stated that execution has started on the pre-engineering. “If we finish the engineering scope on time – I think it shouldn’t be more than 10 months – then we can now go into execution of phase one.
According to him execution is when you go to sites. But in the next three months, we want to start putting the proposal for phase one together, not when we finish the pre-engineering. If phase one, he said, goes into reality before the end of the current administration, it means we would have been able to move from 4,500MW to 7,000MW.
“On phase one where we are now, I think we are fine, and on course, apart from the fact that on the transmission scope, the sites have been increased. Initially, it was supposed to greenfield projects – build new ones. But they are saying fix even the ones that are not working. So, it has expanded from 11 sites by an addition of 22. But you know that the funding for this project, 85 per cent of the money is coming from Germany; it is coming from the German banks. The Federal Government is supposed to guarantee 15 per cent through the Ministry of Finance. They are just supposed to pay 15 per cent of the project, and then the balance will come from international lenders”
However for the pre-engineering phase, the government is paying us 100 per cent. We have not used the 85:15 split.
“To make it simple, once we get into execution, they will now add whatever percentage they have paid for the pre-engineering. So, we haven’t sorted the banking stage completely. We said part of that your 15 per cent a little chunk can completely fund the engineering so that we don’t delay,” he said.