FG Signs $463 Million agreement for distribution lines upgrade with Chinese consortium

FG Signs $463 Million agreement for distribution lines upgrade with Chinese consortium

To enhance the availability of electricity to homes and businesses nationwide, the Federal Government of Nigeria, represented by the Ministry of Power, has signed $463 million distribution lines upgrade contract with a Chinese consortium. The contract to be financed by the China Exim Bank has both off-shore and significant on-shore content.

In a statement by Bolaji Tunji, Special Adviser for Strategic Communication and Media Relations, Minister of Power Chief Adebayo Adelabu announced the signing of a Memorandum of Understanding (MoU) between the FGN Power Company, the Special Purpose Vehicle (SPV) responsible for implementing the Presidential Power Initiative (PPI) on behalf of the Ministry of Power and a Chinese consortium consisting of China Civil Engineering Construction (CCECC) and TBEA Energy.

This agreement is aimed at upgrading the distribution lines infrastructure under Lot three (3) of the PPI, which encompasses the regions served by Jos, Kano, Abuja, and Kaduna distribution companies. The signing ceremony took place during the 3rd Belt and Road Initiative (BRI) event held in Beijing, China.

A similar MoU was signed between the Transmission Company of Nigeria (TCN), CCECC and TBEA to establish a super grid for the power sector. The Minister and his team were hosted by these two organizations, particularly CCECC, which has been operating in Nigeria for the past 42 years. The presentation was conducted by Mr. Liu Wiemin, Global Chairman of CCECC, and Mr. Huang Hanjie, TBEA Global President.

The statement further disclosed that the Nigerian delegation to China was led by Vice President Kashim Shettima, accompanied by Adelabu, Minister of Works, David Umahi; Transportation Minister, Sa’idu Alkali; Foreign Affairs Minister, Ambassador Yusuf Tuggar and heads of various government agencies.

The Belt and Road initiative, established by the Chinese government a decade ago, seeks to promote infrastructure investment and cooperation across approximately 70 countries in Africa, Asia, and Europe. In 2018, Former President Muhammadu Buhari signed the Belt and Road agreement on behalf of the Nigerian Government.

Speaking at the signing ceremony, Chief Adelabu assured both companies of a long-term partnership, given the strong relationship between China and Nigeria, which was further strengthened at the BRI event. Adelabu also outlined President Bola Tinubu’s administration’s plans to rejuvenate the power sector by addressing critical requirements and implementing impactful projects. He stated, “Efforts are underway to finalise the sector’s reform with a new Electricity Act signed by Mr. President to achieve these goals.”

The Minister emphasised that despite its current challenges, Nigeria remains a unique and viable environment for investment. He highlighted the significance of the PPI in resolving capacity constraints within the transmission and distribution networks, “it is therefore critical to ensure reliable power is accessible to support economic growth across various sectors”, he said.

Adelabu expressed confidence in the ability of both companies to execute the distribution line projects with the highest standards of professionalism.

The CCECC and TBEA Energy teams also expressed their commitment to collaborating on the Presidential Power Initiative (PPI) as a consortium in line with the Minister’s vision to create a robust sector for the benefit of Nigerians.

The Managing Director, FGN Power Company, Mr. Kenny Anuwe, stated, the upgrade of distribution lines is a crucial component of the PPI, as the primary capacity constraints are within the distribution sub-sector. Addressing this issue alone will result in the release of at least 2,000MW within the DisCos in the designated Lot.

The meeting concluded with all parties expressing their appreciation and a commitment to strengthening cooperation, with the potential for further investments by all parties.

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