FG, Chinese firm sign $328.8m electricity transmission agreement

The Federal Government on Wednesday signed a $328.8m contract with Chinese firm China Machinery Engineering Corporation to rehabilitate and expand Nigeria’s electricity transmission network under Phase 1 of the Presidential Power Initiative.

The pact was for engineering, procurement, construction, and financing for the development of 330 kV and 132 kV transmission lines across the country, aimed at improving grid reliability and reducing stranded generation capacity.

The report added that the project will be coordinated by FGN Power Company, a special purpose vehicle established by the federal government to oversee implementation of the PPI.

Speaking at the contract signing ceremony held at the ministry headquarters in Abuja, the power minister, Chief Adebayo Adelabu, said the agreement is a bold and transformative step forward in the industry, one that promises to improve electricity transmission standards in the country.

He explained that the agreement would cover 544 kilometres of transmission lines with a load capacity of 7,140 megawatts, spanning both brownfield and greenfield sites.

The contract, valued at $328.8m, according to him, will ensure efficiency and prevent stranded capacity in the grid. These projects have been strategically divided into two priority batches.

He said, “Today, we take an even bolder step forward. We are here to witness the formal signing of a landmark Engineering, Procurement, Construction, and Financing contract between the FGN Power Company and the esteemed China Machinery Engineering Corporation.

“This agreement, valued at $328,818,916.99m, signifies a major leap in the implementation of Phase I of the PPI.”

He said the project will result in CMEC undertaking the vital task of rehabilitating and constructing an extensive network of 330 kV and 132 kV transmission lines under Phase I of the Presidential Power Initiative.

He explained that these critical infrastructure projects would act as the main arteries for delivering increased power from midstream transmission directly to homes, businesses, and industries, helping to strengthen the country’s economic foundation.

Providing more insights into the project, the power minister described it as a vital step toward resolving persistent bottlenecks in Nigeria’s power value chain. He emphasised that enhancing the transmission network is essential to ensure that generated electricity is delivered efficiently to end-users.

He noted that the signing of the agreement demonstrated the federal government’s commitment, under the leadership of President Bola Tinubu, to providing stable and reliable electricity to Nigerians.

“This project is not an isolated endeavour. It is deliberately designed to seamlessly complement the ongoing mid-stream transmission enhancements. Our vision is a holistic one – from generation to the last mile of distribution.

“By focusing on upgrading and expanding our transmission network, we are directly addressing a key bottleneck in the power value chain.

“This will translate to a significant improvement in electricity reliability and accessibility for millions of Nigerians, fostering economic growth, creating jobs, and enhancing the quality of life for our citizens.”

Adelabu also revealed that the ministry has reached tangible progress with the Presidential Power Initiative with the successful receipt and ongoing deployment of ten state-of-the-art power transformers and ten mobile substations from its esteemed partners at Siemens Energy.

Adelabu revealed that these vital assets, now being strategically installed across the nation in locations like Okene, Amukpe, Potiskum, Apo, and many others, are already adding over 700 MW to our transmission capacity, easing critical constraints and bringing us closer to a more robust and reliable grid.

He added, “Just yesterday, we reflected on the tangible progress of the Presidential Power Initiative with the successful receipt and ongoing deployment of ten state-of-the-art power transformers and ten mobile substations from our esteemed partners at Siemens Energy. These vital assets are now being strategically installed across the nation in locations like Okene and Amukpe. Potiskum, Apo, and many others are already adding over 700 MW to our transmission capacity, easing critical constraints and bringing us closer to a more robust and reliable grid.”

Also providing further details, Managing Director of FGN Power Company, Kenny Anuwe, described the partnership with CMEC as a strategic move to develop a robust transmission network capable of supporting increased generation capacity.

He explained that CMEC’s involvement complements the ongoing collaboration with Siemens Energy, which focuses on generation and high-voltage transmission technologies.

He also said the $328.8m contract is a testament to the meticulous planning, dedication, and collaborative spirit that underpins the PPI.

According to him, it signifies a concrete step towards addressing a critical aspect of the power infrastructure – the transmission network.

Anuwe said the expansion and upgrade of the transmission infrastructure are crucial for effectively transporting the increased power generated through the ongoing mid-stream projects to where it is needed most – at homes, businesses, and industries.

The managing director also said, “At FGN Power Company, our mandate is clear: to expeditiously deliver improved power supply to all Nigerians. We recognise that a robust and reliable transmission network is the backbone of a stable power sector.

“This partnership with CMEC is a strategic move to strengthen that backbone, ensuring that the investments being made in generation can translate into tangible benefits for the Nigerian populace.

“We are particularly delighted to partner with China Machinery Engineering Corporation on this transformative project. Their global reputation for engineering excellence, project execution capabilities, and commitment to quality is well-established. We are confident that their expertise will be invaluable in delivering this critical infrastructure efficiently and to the highest standards.”

Vice President of SINOMACH, Li Xiaoyu, also attended the event and expressed appreciation to the Nigerian government for its trust in CMEC, adding that the project would play a significant role in improving electricity delivery across the country.