Nigeria and five German companies entered into an initial agreement on Tuesday to help increase power supply in Africa’s oil rich country over the next 11 years. Germany will generate 6,500 MW by 2020 after building new power stations by placing hydro, gas thermal, solar, coal, wind, and waste-to-energy plants throughout Nigeria.
In addition, companies from the European nation will expand existing dams and upgrade power substations to improve power generation. The production of power decreased significantly a year ago from 3,000 MW to a staggering low 1,000 MW which is attributed to a combination of corruption and poor maintenance. Analysts recognize addressing the power shortage is one of the main components to stimulating growth in the largest oil exporter in Africa.
The power crisis has forced hundreds of factories to close, leaving many Nigerians unemployed. Nigerian President Umaru Yar’Adua created a committee to review the sector. The committee announced in June that Nigeria needed $85 billion to meet its domestic power demand that is estimated to be around 20,000 MW.
Yar’Adua said, “It is evident that the original objection 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.”