By Ahmed Ayanfe
To execute the first phase of the Presidential Power Initiative (PPI), the Nigerian government would need €2.3 billion, equivalent to N991.99 billion, using the official exchange rate of N431.3/€.
This is according to figures obtained from the Federal Government.
The PPI is an initiative of the Federal Government conceived during a meeting between Nigeria’s President Muhammadu Buhari and German Chancellor, Angela Merkel, on August 31, 2018.
It was conceived as a three-phase initiative to rehabilitate and expand Nigeria’s electricity grid through improved generation, transmission, and distribution.
The project has three targets of raising electricity generation to 7,000megawatts, 11,000megawatts and 25,000megawatts in its first, second and third phases respectively.
To achieve this, the Federal Government had to establish a special purpose vehicle, the FGN Power Company, to own and execute the PPI.
Data obtained in Abuja on Friday from the PPI Financing Structure document, put together by the FGN Power Company, showed that about 60 per cent of the €2.3 billion would come from a consortium of German banks, while other financial institutions would provide the balance.
The document read in part, “The total project cost for PPI Phase 1 is estimated at €2.3 billion in which about 60 per cent of the funds will come from the consortium of German banks to cover the offshore project cost.
“The financing for the offshore project will be sourced from German banks at a concessionary rate, which will be covered up to 90 to 95 per cent by the Euler Hermes Aktiengesellschaft (German Export Credit Agency).
“The remaining 40 per cent of funding for the transmission and distribution onshore works will be sourced from other financiers.”
It added, “FGN Power Company has already commenced engagement with the development finance institutions for mutual collaborations on the required onshore funding.”
The company named some of the DFIs to include the African Development Bank, Afrexim Bank, French Development Agency, as well as the European Investment Bank.