Siemens is ready for work to improve power output to 25,000MW

SEUN SULEIMAN is an experienced business strategist and managing director of Siemens Energy Nigeria with over 15 years experience and deep expertise in power sector across Europe and West Africa. In this interview with DIPO OLADEHINDE, he gives insight and updates about Siemens electrification plans for Nigeria and how the firm plans to navigate challenges when executing the Presidential Power Initiative.

As the new CEO of Siemens Nigeria, what’s your agenda for the power sector in Nigeria?

We have a project currently ongoing called the Presidential Power Initiative (PPI), it has been ongoing for a while now. On the 18th of February 2021, we were in Abuja to sign the award letter for the pre-engineering scope for the first phase of the project, which is more like a kick-start of the project.

Phase one of the Siemens power deal is basically to focus on essential quick-wins measures to increase the system’s operational capacity to 7000MW and to significantly reduce Aggregate Technical, Commercial and Collection (ATC&C) losses. This is basically the difference between the amount of electricity received by a distribution company from the transmission company and the amount of electricity invoiced to customers.

The signing of this pre-engineering contract ought to have happened maybe one year or six months ago, but it’s just happening now. Can Siemens still meet up with the projected deadline for the first phase?

On our side, Siemens is very ready for the task ahead, however, when the government is undergoing big projects like this, they need to set out with the right modalities which is why the government set up a brand new company called the FGN power company.

This company has actually put its structures together and hit the ground running with an initial discussion, which is why we are now at the stage of award letter.

So, I will not necessarily say it’s a negative thing we are still at this stage because I understand setting up a new company to transact business with Siemens takes time.

This project is directly under the Office of the president, which is controlled and administered from the Office of the Chief of Staff of the President, on behalf of the president.

After the signing we achieved on February 18, we are now focusing on the execution to see how we can do more by completing the preengineering on time, thereafter we would be able to move into other phases of the project.

How soon will Siemens starting execution of the pre-engineering phase or have you started?

We are looking at finalising the letter of credit and also working on the advance payment. Once we get those things rights, it means the order can be recorded on our books.

There was supposed to be a financial arrangement with the German ECA and the federal government who is als0 expected to come up with its counterpart funding, What’s the update on this?

The German ECA and the federal government funding is currently being tidied up and work is currently going on which means the arrangement is still standing.

So why are you expecting a letter of credit from the Federal Government?

The reason why we are expecting the letter of credit is because we are in the pre-engineering phase. In this phase, we have five different proposals, some of which are direct with our parent company aboard.

There has to be a letter of credit between the parent company and the FGN power company for further transaction to occur, although for the local portion from Siemens Nigeria, we don’t need it. Like I said earlier, we have what it takes to hit the ground running, but we need to make sure everything is well detailed as well.

For instance, we need to make sure our purchase orders are in line with the proposal we initially submitted to the federal government.

Siemens is not building any power stations, so how do you intend to solve the problems of the power rejections by the Discos on account of infrastructural deficit, which am sure is part of your mandate?

Our job as an Original Equipment Manufacturer (OEM) is to revamp the infrastructure deficit in different phases, which would help us in releasing every stranded power in the system.

Where we come in, is to go through our pre-engineering, execution, and be able to revamp those equipments as soon as possible. What it means is that the system will work by itself, then what the Discos and Gencos are doing will be able to sink in.

Can you give us a timeline of when the first phase will be completed?

Basically, as an OEM company, we are working for the FGN power company because it’s their project and we are just the original equipment manufacturer working with them to execute.

On our side, we are ready to hit the ground running basically in terms of the pre-engineering to be able to actualise it on time, but in terms of the timeline, you should speak to the FGN power company.

Starting phase one of the project by 2021, can we still achieve the initial communicated timeline?

In my view, I think we’re on track, going by the pace we are currently going with the pre-engineering arrangement. We have our teams in Abuja working and discussing on a daily basis to make sure the project goes into execution which wasn’t the case before.

Also, we are having discussions with the management of FGN Power company who are also very willing to make sure the project succeeds. I am impressed by the interest shown by professor Agboola Gambari, chief of staff to the president, the minister of Finance, Zainab Ahmed, minister of Power and a host of other stakeholders. If the tempo is maintained, in no time, we would be done with the job and we shall all be happy for it.

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Nigeria has a huge energy demand covering a very large landmass, do you have enough manpower in-country to take care of the executions after the pre-engineering you talked about?

We are a very big company with the right expertise so there is no doubt about that. However, concerning executions, we already have all our plans mapped out for each stage we come across and the sort of resources we will be needing in Nigeria.

Siemens is also getting the right kind of support from the federal government, which will also hasten our plans to make sure they are executed on time.

How much interfacing do you have with the Discos?

We don’t have a direct interface with the Discos or Transmission Company of Nigeria; we have only one interface which is done through the FG power company who makes sure all the major stakeholder’s needs are aligned with the project proposal. However, we are aware of all the major critical issues facing all the stakeholders.

Will the FG power company acting as a middleman between Siemens and the Discos or Transmission Company not slow down the executions of the project?

Going by the memorandum of understanding signed between Siemens and the Nigerian government, the contractual model was between a Nigerian government and the German government who in turn nominated Siemens as a German company to execute. So we still need to have one interface to be able to execute our contract.

When we started three years ago, we did a site assessment on all the Discos by ourselves; so it’s not like we are alienated, we have all the clarity we need. We are at the stage where we need to get to work.

How do you plan to solve issues concerning host communities?

In Siemens, we have a Corporate Social Responsibility (CSR) team that is anticipating challenges we might likely face either as OEM or other Engineering, procurement, and construction (EPC) contractors that would be working along with us.

In several of our meetings, we decided there was a general consensus to make sure we are visible in the lives of the people we work with along the value chain for all the PPI projects we work in.

What kind of challenges do you envisage when executing or are there challenges you are currently faced with and you wish they are not there?

In my view, there is nothing you want to do in terms of a big project like this, that there won’t be challenges. But what is most important is, are you communicating effectively along every stage which is critical in solving problems.

The atmosphere at the signing of the pre-engineering stage shows everyone is working towards the same goal. If we maintain the same momentum, the project will be very successful.

The poster child for this initiative is Eqypt. What is the difference between what you’re doing here and what your company did in Egypt?

If you recall, this project was initiated after the late Chief of Staff, Abba Kyari, paid a courtesy visit to Egypt. So, the project in Egypt is a show of what Siemens can do which we also plan to replicate in Nigeria.

The project in Egypt was extremely successful, the template and the blueprint is not far different from what we plan to have in Nigeria.

From the Central Bank of Nigeria (CBN) to the World Bank, there seems to be a lot of initiatives going on in Nigeria’s power sector. Are these programs not clashing with what Siemens plans to do?

In our view at Siemens, we believe that the PPI is very robust and what we should focus on now is to collapse whatever gains that we make into the PPI so that we’ll all be able to achieve the same objective.

When you have too many things on the table, they might lead to diversions, which will make measurement more challenging. On our own part, we are giving the solutions straight to the Discos and TCN, which would focus on improving the power output to 25,000 MW cumulatively.

If you have look at what the CBN and the World Bank are doing, you see a lot of similarities with the PPI, which have been in existence for more than two years now.

I know Siemens is into projects concerning wind power or renewables, after PPI what specific area will you focus on in Nigeria?

We have been in Nigeria for over 50 years and our main business has been power to individuals or private companies.

At our Port Harcourt centre, for instance, we have tons of generating assets with private companies. We have sold over 350 assets to different companies, after this purchase we also support these companies in all sorts of ways to generate a large amount of power for their daily needs. We also have a workshop where we do a lot of activities in terms of repair works.