A South Korean company, Daewoo Engineering and Construction Company Limited, has signed a Memorandum of Understanding with the Federal Government to facilitate the production of 10,000 megawatts of electricity in the country.
The company undertook to provide 20 per cent equity in the various projects identified under the scheme, in addition to providing expert advice and guidance on electrical, production and construction of power projects to companies wishing to do business in Nigeria under the agreement, a statement from the ministry indicated.
The Minister of Power, Prof. Bart Nnaji, according to the statement, signed on behalf of the government, while the President and Chief Executive Officer, Daewoo E&C, Mr. Sang-Real Kim, signed on behalf of his company, at an event that took place at the Ministry of Power in Abuja.
“Today is a very important day for the relationship we want to create between ourselves and Daewoo, and the people of Korea,” Nnaji said in remarks to flag off the signing ceremony.
“The President was in South Korea and he gave us an opportunity to reach your company and we agreed with your CEO that we would enter into a memorandum of understanding on how to work together and how your company would work with us to improve power supply in Nigeria,” he added.
Nnaji explained that the MoU would change the old system of contractors coming to the country simply to work and get paid, and then go back.
“We are now making the power sector attractive for investment by international investors,” he said to the visiting Daewoo team members, adding that it was now hoped that they would not only execute contracts but also invest in the power sector under the MoU.
In his remarks, the Chairman, Daewoo E&C, Chief Joseph Penawou, expressed delight at entering into the MoU with the Federal Government.
While previous MoUs had guaranteed 10-15 per cent equity or other forms of investment in the reform-bound Nigerian power sector by foreign parties; Daewoo, under the terms of its MoU, would invest 20 per cent equity in various engineering and construction services in the country’s power sector, the statement explained.
It is the fifth MoU to be signed by the Federal Government and various international investors since the launch of the Nigerian power reform road map on August 26, 2012.
The other MoUs were signed with US Exim Bank to provide $15bn credit to the Nigerian power sector and with Siemens of Germany to assist in the provision of 10,000MW of power generation infrastructure in the country and 10-15 per cent equity in new power generation stations.
Other MoUs were signed with General Electric of the United States and Electrobras of Brazil under identical terms with the one signed with Siemens.