Siemens Revives $2.3bn Nigeria Power Deal to Boost Grid Capacity to 25,000MW
- Siemens revives $2.3 billion power agreement with Nigeria to address electricity shortages
- The partnership aims to boost grid capacity from 4,000MW to 25,000MW and end incessant collapses
- Germany eyes Nigeria as a key gas partner for long-term energy security and improvement in Africa
Pascal Oparada is a journalist with Legit.ng, covering technology, energy, stocks, investment, and the economy for over a decade.
German engineering powerhouse Siemens has formally restarted its $2.3 billion power agreement with Nigeria, reigniting hopes of ending the country’s persistent grid collapses and chronic electricity shortages.
The deal, structured as a government-to-government partnership between Nigeria and Germany, is designed to overhaul the nation’s ageing transmission and distribution infrastructure.
The project forms the backbone of the Presidential Power Initiative, an ambitious plan to dramatically expand grid capacity and improve reliability.
Source: Getty Images
Germany’s Deputy Head of Mission in Nigeria, Johannes Lehne, disclosed that the agreement had remained largely inactive until the administration of Bola Tinubu revived it after assuming office.
Speaking at the Sub-Saharan Africa International Petroleum Exhibition and Conference in Lagos, Lehne described the renewed push as a turning point for the long-delayed initiative.
“The partnership was dormant until the beginning of President Tinubu’s time, when we revived it,” he said.
From 4,000MW to 25,000MW
Initially conceived under former President Muhammadu Buhari, the Siemens deal was structured in phases. The targets are ambitious: increase available capacity to 7,000 megawatts, then 11,000 megawatts, and ultimately 25,000 megawatts.
Nigeria currently generates roughly 4,000 megawatts for a population of over 200 million people, a shortfall that has crippled industrial growth and left millions dependent on generators.
An earlier review of the project in 2023 signalled potential hurdles. Minister of Power Bayo Adelabu noted that economic realities had shifted since the agreement was first signed in 2018, prompting a comprehensive reassessment of scope and financing.
According to a report by Business Insider, delays were attributed to the COVID-19 pandemic, political transitions and reforms within the power sector.
Despite setbacks, progress has been made. A pilot phase included the importation of 10 mobile substations and 10 transformers, expected to raise transmission capacity by about 1,300 megawatts once fully deployed.
Germany expands energy cooperation
Beyond grid upgrades, Germany is deepening energy ties with Nigeria. Lehne highlighted Berlin’s Energy Support Programme, which shares technical expertise in renewable energy expansion, diversification strategies and system stability.
Germany’s own energy landscape shifted sharply after the Russia-Ukraine crisis, prompting rapid investment in liquefied natural gas terminals and broader supply diversification.
Lehne indicated that Nigeria could become a strategic gas partner as Germany seeks long-term energy security.
“It is not clever to put all your eggs in one basket,” he said, underlining Berlin’s openness to sourcing gas from Nigeria.
Gas reserves, production gap
Nigeria’s gas potential remains vast but underutilised. According to the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), the country holds about 210.54 trillion cubic feet of proven gas reserves, the largest in Africa, with possible resources estimated at up to 650 trillion cubic feet.
Source: Getty Images
Yet daily production hovers around 7.5 billion cubic feet, leaving Nigeria outside the ranks of top global producers.
Officials argue that reforms introduced under the Petroleum Industry Act have reduced fiscal uncertainty, lowered royalty rates and improved regulatory clarity, helping to attract new investment into gas development.
Execution will be key
While the revival of the Siemens initiative signals renewed political will and international backing, experts caution that delivery, funding discipline and policy consistency will determine whether the long-promised transformation becomes reality.
If successfully executed, the $2.3 billion project could mark a decisive step toward stabilising Nigeria’s fragile grid and unlocking the economic growth long constrained by unreliable power supply.
FG announces plan to cut electricity subsidy
Legit.ng earlier reported that Power Generation Companies (GenCos) have criticised the federal government’s announcement that it would stop bearing electricity subsidy costs alone from 2026 and instead share the burden among federal, state, and local governments.
The Managing Director and Chief Executive Officer of the Association of Power Generation Companies, Joy Ogaji, said claims of government subsidy are not backed by budgetary allocations or official documentation.
As reported by PUNCH, she argued that there is no verifiable evidence of an existing electricity subsidy, stressing that generation companies have been absorbing revenue shortfalls for more than a decade
Source: Legit.ng
