FEC approves €161 Million for power substation upgrades

Under the Presidential Power Initiative (PPI), contracts for the engineering, procurement, and building of new substations have been approved by the Federal Executive Council (FEC) in an effort to strengthen Nigeria’s electrical industry.

According to report, the contracts were authorized by the council at its Abuja meeting on Monday.

Following the meeting, Adebayo Adelabu, the minister of power, told reporters that the contracts, which total about €161 million, will allow for the construction of 21 new substations nationwide as well as the renovation of 14 existing ones.

According to him, the project’s goal is to boost the country’s electrical supply.

Adelabu stated: “The approval marks a crucial step in delivering on President Bola Ahmed Tinubu’s promise to enhance Nigeria’s power capacity”.

He reportedly said that the initiative’s short-term goal is 8,000 megawatts (MW) in the next 12 to 24 months, with the ultimate goal of reaching an operating capacity of 12,000 megawatts in four years.

He stated that Sokoto, Abeokuta, and Onitsha are important sites for the substations.

Adelabu further said: “These upgrades are essential for stabilising our transmission network and ensuring reliable power supply to Nigerians.

“There were basically two approvals for the Federal Ministry of Power as presented.

“The first was an approval for the award of contract, for engineering, procurement, construction and financing for the implementation of the 330/132 KV and 132/33 KV substations upgrade under the phase one of the presidential initiative, popularly known as the Siemens project.

“Subsequent upon completion of the pilot phase of this project, the FEC at today’s meeting considered it necessary for us to move forward as promised by the president of the Federal Republic of Nigeria at a meeting he held with the President of the Republic of Germany last week”, he added.

As reported, Adelabu stated that the approved cost of the first batch of the “phase one of the Siemens project was €161.33 million”.

“Phase one of this Siemens project, as it relates to the transmission, upgrade and expansion, actually includes 14 brownfield substations that need upgrade and revamping, and 21 Greenfield substations, which are new substations to be built across the country to improve the transmission segment”, the minister said.

“The first batch of this phase one of the projects include one Onitsha, 330/133 KV substation under the Enugu electricity distribution company.

“Two, Offa 132/33 KV substation under the Ibadan electricity company.

“There is the new Abeokuta 330/132 KV substation.

“We have Ayede 330/132 KV substation. And lastly, Sokoto 132/33 KV substation.

“Those are the five substations to be worked upon under the first batch of phase one of the Siemens project.

“The purchase of the Nelmco office complex is approved by the FEC“.

Adelabu added that the Nigeria Electricity Liability Management Company (NELMCO) in Abuja was granted permission by the FEC to purchase an office building for N1.7 billion.

According to him, the approval was made in order to ensure that NELMCO could successfully handle its increased obligations in the reorganized electrical sector and to lower the rapidly rising leasing costs.

“The office complex approved for outright purchase is at Plot 2148, Cadastra Zone A02 Wuse 1 District Abuja.

“The cost of this acquisition is N1.7 billion inclusive of 7.5 per cent VAT”, Adelabu said.

The minister reportedly said the acquisition is necessary to “avoid the escalating rent, which is being increased regularly due to inflation”.

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