Siemens Hosts Project Financing Forum

Building on the success of the Power & Gas Customer Forum held in February 2016 and by popular demand of its loyal customers and numerous business partners, Siemens Limited Nigeria hosted a Project Financing Forum at the Intercontinental Hotel, Victoria Island on the 17^th of May, 2016.

A pivotal achievement of this Forum was the introduction of Siemens Financial Services (SFS) as the financial adviser to the operating units of the Siemens Group and outlining the various commercial tools it has developed to provide financial aid to qualified power projects in the Sub-Saharan African Region. Development Funding Investment (DFI) was presented as a new initiative Siemens is employing as a market growth agent to drive the progress of power projects on the African continent. With DFI, Siemens desires to get involved at the early stages of IPP developments and collaborate closely with project developers to create a structure that makes them eligible for the funding provided in this scheme.

A key cog in the wheel of the power project development process is the negotiation of bankable power purchasing agreements (PPAs) between an IPP developer, the Bulk Trader & the DISCOs. Unfortunately, the only PPA successfully signed since the privatization of Nigeria’s Power Sector till date is Azura; which Siemens is a part of.

At the Financing Forum, a panel was called to discuss the challenges with securing viable PPAs in the country’s current economic climes. The panel discussion, titled “Expediting the Power Purchase Agreement Process” involved major players of the Nigeria Electricity Supply Industry and included Shu’aibu Abubakar of the Nigeria Electricity Regulatory Commission (NERC), Mike Uzoigwe of Sahara Energy (SE) and Nosa Igbinedion of Eko Electricity Distribution Company (EKEDC). Gathering from the panel discussion, it is evident that the regulatory agencies are struggling to come up with a structured solution to expedite the PPA processes.

The last panel session was with some of the in country banks addressing their roles in financing power projects. According to the banks, one of the major issues impeding their funding of power projects is that in the current market and economic structure, investors are hesitant and don’t necessarily see On-grid IPP projects currently as being bankable; till there is a clear roadmap and action put in place by the Government to undertake the reformation of the power sector in order to expand supply, and address chronic issues hampering improvement in this area, there will be no encouragement for the Private sector to inject funds.

It was concluded that if the Federal government will focus on addressing Gas pipeline vandalism & gas supply constraints, power theft, lack of power marketing and customer engagement, vandalism, generation, transmission and distribution capacities, Nigeria will be able to deliver a higher mega watt capacity to consumers nationwide.

At Siemens, we recognise the importance of stable electricity to the improvement of the Nigerian economy; we also appreciate the challenges that are being faced by stakeholders in meeting the nation’s objectives to resolve these problems. As such, Siemens remain committed to providing innovative services and solutions that answer the needs of the nation’s energy demands.

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