By Williams Anuku, Abuja
President Muhammadu Buhari has ratified an anticipatory approval for the release of €15.21 million (N6,940,081,465.20) offshore and N1.708 billion onshore, totalling N8,648,081,465.2 towards the counterpart funding for the power deal with Siemens AG.
The power agreement was signed by the Nigerian and German governments last year.
The ratification by the president took place on Wednesday during the weekly Federal Executive Council (FEC) meeting.
Zainab Ahmed, the Minister of Finance, Budget and National Planning,who gave further insight about the anticipatory payment told State House Correspondents, that the memo seeking the rectification was jointly presented with her Power Ministry counterpart, Saleh Mamma.
Ahmed said it’s geared towards the counterpart funding for the bilateral agreement from German Consortium guaranteed by the German Government through Euler Hermes to finance the implementation of the end to end grid modernization and expansion programme of the project.
It would be recalled that the Federal Government had in December 2019, allocated N61 billion for the Nigeria Electrification Road map which will be developed in partnership with Siemens AG.
In July 2019, the government and Siemens signed a Letter of Agreement on the Nigeria Electrification Road map after President Buhari and the German Chancellor, Angela Merkel met on August 31, 2018, in Abuja.
Nigeria is expected to spend about €3.11 billion or N1.15 trillion across four major states. The Nigerian electrification project has three phases and it aims at achieving 25,000 megawatts of electricity in the country by 2025.
Power projects in the budget include the 3,050-megawatts Mambilla hydropower plant in Taraba State, for which N2 billion counterpart-fund was set aside. Others are 2x60MVA 132/33kV substation at Gwaram in Jigawa State (N717 million); 215MW power station in Kaduna (N190m); and Kashambilla transmission in Taraba (N506 million).
The Finance Minister explained that the amount is for first phase of the three phases project designed to include 23 transmission initiatives as well as 175 separate transformative projects.
She said: So today at council, we discussed the stage one of phase one of this project under presidential power initiative. This project is designed to include 23 transmission initiatives as well as 175 separate transformative projects in the electricity distribution franchises that we have in the country.
“The project will also support the regulator, Nigerian Electricity Regulatory Commission (NERC), to transition towards a programme of improving metering in the electricity industry in the country.
“Let me remind us as citizens that Mr. President and his German counterpart met in Abuja in 31st August 2018 and committed to jointly increase the capacity of the Nigerian electricity grid from current capacity of 5,000 megawatts to 25,000 megawatts over a three phased Programme.
“After this meeting, an MOU was executed on the 23rd of July, 2019 between the Nigerian Government and the Siemens AG with the German Government support.
“The MOU is designed to deliver this end to end modernization programme which we are calling the presidential power initiative. The objective of this presidential power initiative is to address the intractable problems that have bedeviled the Nigerian power industry, over a period of years.
“The project will be implemented in three phases and the subject of our memo today is phase one.
“The facility for this programme is to be sourced from the German consortium and it would be guaranteed by the German government through Euler Hermes covering 85 percent of the project cost, the highly concessional facility with two to three years moratorium, 12 years loan repayment period with an interest rate of liabor plus one percent to liabor plus 1.2 percent. And also the Federal Government is to provide 15 percent counterpart funding as its contribution towards the project.
“We have a provision in the 2020 appropriation revised for the government’s counterpart funding.
“The federal government is taking the loan from the German government with the plan to on-lend this particular loan to the distributing network. 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. And council approved and ratified Mr. President’s approval.”
FEC also approved the ratification of Air transport agreement between Nigeria and the United States of America, USA.
The air transport bilateral agreement is to strengthen economic, social and cultural ties between the two countries.
The Minister of Information and Culture, Alhaji Lai Mohammed, who stood in for the Minister of Aviation, Senator Hadi Sirika said: “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.
“The minister sought council’s approval for ratification of the air transport agreement between USA and Nigeria.
“You will recall that both United States and Nigeria are parties to the Chicago Convention on the 7th of December, 1994. Article 6 of the convention actually urges parties to sign air services agreement with member states to improve social, political and economic ties.
“The US has ratified its own and Mr President and council graciously accepted today to also ratify this agreement. 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.
“So, we will now take advantage of this air transport bilateral agreement to strengthen economic, social and cultural ties between the two countries.”
Minister of Industry, Trade and Investment, Niyi Adebayo, said Council also ratified President’s approval of the Investment Promotion and Protection Agreement, signed in 2016 between Nigeria and Singapore on the one hand, and Nigeria and the Kingdom of Morocco on the other hand.
He said: “In 2016, the Attorney-General of the Federation came up with a new model of Investment Promotion and Protection Agreement and that year Nigeria signed based on that new model between Nigeria and Morocco, and Nigeria and Singapore.
“The whole idea was to grant more protection to Nigerian investors, when they invest abroad and to give Nigeria more protection when other investors come into Nigeria.
“Basically, those were what we were in FEC for and the Council graciously approved that Mr President should ratify and the Attorney-General will present to Mr President for his ratification and the agreement will come into effect thereafter.”
Meanwhile, Minister of Environment
Mohammed Mahmoud also confirmed that Council approved new National Forest Policy, a revised policy.
He said: “The old one was formulated in 2006. Why the new one? We realize that the old one is not catering for the current situation at hand. Forestry is a big sector of the economy. It provides a lot of employment opportunities, reduces poverty, provides means of livelihood and foreign exchange from export of wood. Without a sustainable forest management, you cannot have all of these benefits.
“We also know that right now particularly with the issue of climate change, forest is a big part of climate change mitigation. The more forest we have, the more cover we seek. It means taking out the emission out of our planet and stabilizing the temperature of the planet and the catastrophic effects of climate change.
“So, we have revised it and produced a new one. And we believe this will go a long way in regenerating employment which is an issue at hand. Youth and women are the vulnerable in the rural areas usually bear the brunt of this issue of deforestation. “The more we populate our forest with trees, the better for the people not just in the rural areas but even the economy.
“Currently, we have suspended export of forest products because we do not have enough control under the old policy. So, we have suspended that. Charcoal exploitation has been banned completely. These are some of the things that are causing degradation of our land.
“When you lose forest, it’s not just forest that you are losing, you are also losing the land because the land will be eroded. It may not support agriculture, thereby foodstuff becomes very expensive. The people around that forest area become unemployed. Poverty will increase in the long-run. This is a policy that we feel it will go a long way in safeguarding the economy and the planet at the same time, both human capital, and physical environment. It’s a collaboration between federal government, state government, local government, non-governmental organization, CBOs, the private sector, and international organizations. This is something that all hands must be on deck.
“The tree planting campaign has already started unofficially and we have planted millions of trees. But we will be seeking the President’s indulgence to flag off symbolically, national tree planting this year. We expect in one day everybody will plant at least one tree. National tree planting is supposed to be perpetual. It is no longer yearly or monthly. This is basically what forest policy that we have just presented is all about. We have it approved today. We thank Mr President and the council for approving the policy.”