Nigeria, Germany sign deal to boost power supply

Analysts have identified power shortage as one of the main impediments to growth in the world’s eighth top oil exporter which is grappling with its worst electricity crisis in decades. Under the deal, Germany will generate 6,500 megawatts (MW) by 2020 after building new power stations -- hydro, gas thermal, solar, coal, wind and waste-to-energy plants -- in different parts of Africa’s most populous country of 140 million people.

Germany will also help Nigeria expand existing dams and upgrade power substations to improve power generation, which has dropped below 1,000MW from around 3,000MW a year ago, largely due to corruption and lack of maintenance. South Africa, with a third of Nigeria’s population, has over 10 times that capacity. Five German power companies are involved in the Nigeria-German Partnership Memorandum of Understanding (MoU), among them Siemens AG.

Since coming to power in May 2007, President Umaru Yar’Adua has been promising to declare a national emergency on power during which billions of dollars will be invested in the sector. Yar’Adua, who has come under mounting pressure in the last few months to revamp Nigeria’s shambolic power sector, commended German Chancellor Angela Merkel for backing the partnership. “From the time I discussed the issue of the partnership with her in June 2007, up till this moment, she has remained steadfast in the pursuit of its actualization,” Yar’Adua said at a signing ceremony in the Nigerian capital Abuja. “It is evident that the original objective of the partnership, which is to address Nigeria’s energy challenge while guaranteeing Germany’s short and long term energy security, has been properly addressed,” Yar’Adua said.

Any administration that delivers more power to the people will be wildly popular as the number one compliant of most Nigerians is the stop-start power supply that leaves part of the country in darkness for weeks on end. The power crisis has closed hundreds of factories and slashed millions of jobs. A committee Yar’Adua set up to review the sector said in June Nigeria needs $85 billion to meet its domestic power demand, estimated at roughly 20,000MW.

Former President Olusegun Obasanjo spent over $10 billion on the sector during his 8-year tenure but failed to deliver on his pledge to raise generation to 10,000MW by the end of 2007. A parliamentary investigation of the sector under Obasanjo raised questions about why state contracts worth billions of dollars have done little to end constant nationwide blackouts. (Reuters)