Federal Government Approves N13 Billion for Lagos Industrial Transmission Project and $34 Million for Transformer Upgrades

Strategic Insights -

The Nigerian federal government has made significant strides in its power sector reform strategy, approving a N13 billion allocation for the Lagos Industrial Transmission Project and $34 million for the purchase and installation of high-capacity transformers. Minister of Power, Adebayo Adelabu, revealed these developments following the Federal Executive Council (FEC) meeting convened by President Bola Tinubu. The budgetary approvals aim to refurbish Nigeria's power transmission framework, ensuring enhanced reliability of electricity supply amid rising demand.

Key Takeaways:

  • The Lagos Industrial Transmission Project, financed by a $238 million development loan from the Japan International Cooperation Agency (JICA), aims to bolster power supply to major industrial clusters in Lagos, contributing significantly to Nigeria's manufacturing output.
  • The project will guarantee dedicated and stable electricity to industrial estates, driving economic growth and generating employment opportunities.
  • The minister emphasized the importance of upgrading the national grid infrastructure, stating that numerous transformers, cables, and related parts have grown weak and prone to failure, requiring routine maintenance and timely replacements.
  • The approved $34 million will fund the purchase and installation of critical transformer units, including two units of 150MVA 330/132kV transformers, three units of 100MVA 132/33kV transformers, five units of 60MVA 132/33kV transformers, and two units of 30MVA 132/33kV transformers.
  • The upgrade aims to alleviate pressure on overloaded substations, improve voltage stability, and accommodate new transmission capacity being developed.
  • The Council sanctioned N142,028,576,008.17 for the construction of state-of-the-art bus terminals in Nigeria's six geo-political zones, with a contract awarded to Messrs Planet Project Limited for the construction of terminals in Abeokuta, Gombe, Kano, Lokoja, Onitsha, and Ewu in Edo State.
  • The Council issued a directive for all Ministries, Departments, and Agencies (MDAs) still engaged in procurement for the 2024 fiscal year to complete their procurement activities by the end of September 2025.
  • The BPP cautioned that the delay in procurement could expose the government to avoidable financial liabilities, urging President Tinubu to seek a full overview of all projects awarded by ministers and their ministries.

Statistics:

  • N13 billion approved for the Lagos Industrial Transmission Project
  • $238 million development loan from the Japan International Cooperation Agency (JICA) for the Lagos Industrial Transmission Project
  • $34 million allocated for the purchase and installation of high-capacity transformers
  • N142,028,576,008.17 sanctioned for the construction of state-of-the-art bus terminals in Nigeria's six geo-political zones
  • 70+ MDAs still engaged in procurement for the 2024 fiscal year
  • 20+ months since budget passage
  • 2024 fiscal year officially ending in December 2024

Sources:

  • Minister of Power, Adebayo Adelabu, at the Federal Executive Council (FEC) meeting
  • Director-General of the Bureau of Public Procurement (BPP) brief to President Tinubu
  • Secretary to the Government of the Federation (SGF) circular on project reporting
  • Central Results Delivery Coordination Unit monitoring report
  • Finance Act 2020
  • Japan International Cooperation Agency (JICA) development loan agreement for the Lagos Industrial Transmission Project
  • Messrs Planet Project Limited contract for the construction of bus terminals in Nigeria's six geo-political zones