Johannes Lehne, Germany’s Deputy Head of Mission in Nigeria, has said the $2.3 billion Siemens power agreement between Nigeria and Germany remained largely dormant until it was revived under President Bola Tinubu’s administration.
Speaking on Wednesday at the Sub-Saharan Africa International Petroleum Exhibition and Conference (SAIPEC) in Lagos, Lehne stated that the bilateral power partnership had stalled before gaining renewed momentum after Tinubu assumed office.
The Siemens deal, originally conceived under former President Muhammadu Buhari, was structured as a government-to-government framework aimed at overhauling Nigeria’s transmission and distribution infrastructure, stabilising the national grid and progressively increasing available power capacity.
Under the roadmap, Siemens set phased capacity targets of 7,000 megawatts (MW) by 2021, 11,000 MW by 2023, and ultimately 25,000 MW by 2025, ambitious goals given Nigeria’s average supply of about 4,000 MW at the time. However, the project failed to advance significantly.
“The strange thing was that this partnership was dormant until the beginning of President Tinubu’s time, when we revived this. We are in the power sector. We have a Presidential Power Initiative with President Tinubu for the reactivation of the Nigerian transmission system and electricity to everybody,” he said.
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He added that beyond the Presidential Power Initiative (PPI), Germany has expanded its cooperation with Nigeria through an Energy Support Programme, leveraging Berlin’s experience in energy diversification and transition.
Lehne noted that between 2021 and 2024, Germany accelerated investments in renewable energy sources such as solar, wind and geothermal as part of efforts to cut emissions and reduce hydrocarbon dependence.
However, he argued that what many describe as “energy transition” is more accurately an “energy addition,” involving diversification rather than outright replacement of fossil fuels.
“There is no real energy transition; there is energy addition and a different mix of energy sources, which every country should consider to have the right energy policy,” he added.
He stressed that gas remains central to Germany’s energy stability and industrial base, and will likely continue to play a key role for the next two to three decades. At the same time, he said the Russia-Ukraine crisis exposed the risks of relying heavily on a single energy supplier.
Germany has since diversified its import base and developed four liquefied natural gas (LNG) import terminals capable of handling between 80 and 84 gigawatt hours of gas daily, alongside pipeline supplies.
“For Germany, diversification of energy sources all over the world is part of policy. We need different partners. It is not clever to put all your eggs in one basket,” Lehne stated, explaining that if it’s available, Germany was ready to import gas from Nigeria.
With a gross domestic product of about $5 trillion and limited domestic hydrocarbon resources, Germany depends significantly on oil and gas imports. Lehne said deepening ties with resource-rich countries such as Nigeria aligns with Germany’s long-term energy security strategy.
Also speaking at the session, Jennis Anyanwu, Deputy Director of Gas Utilisation at the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), said Nigeria’s main challenge is not gas availability but converting its vast reserves into economic value.
He disclosed that Nigeria holds about 210.54 trillion cubic feet (TCF) of proven gas reserves, ranking first in Africa. Including contingent resources, the upside potential rises to about 650 TCF.
“The issue here is not about whether there is availability of gas. Gas is abundant in Nigeria, but the issue is accessibility and whether it is translated into value for the people and drives the economy as expected,” he said.
Despite its large reserves, Nigeria’s gas production stands at roughly 7.5 billion cubic feet per day, placing the country around 19th globally in output.
“We rank number one in Africa in terms of reserves, but we are not number one in production. We are somewhere around number 19 globally. So we have huge reserves, but that does not translate into production,” he said.
He explained that approximately 54 percent of Nigeria’s gas production is associated gas produced alongside oil, reflecting the historical development of gas under oil-driven economics rather than as a standalone commodity.
“Gas development does not occur simply because there is a resource. It only occurs when fiscal terms, regulatory frameworks and commercial structures align with the realities of gas economics, which are quite different from oil,” he said.
According to him, the Petroleum Industry Act (PIA) has helped de-risk gas investments by clarifying fiscal terms and reducing royalty rates. While onshore gas royalties previously stood at seven percent and offshore at five percent, the PIA introduced a flat five percent rate, with a further reduction to 2.5 percent for gas utilised domestically.
