[Businessnews] South Korean company Daewoo Engineering and Construction Company has entered into a Memorandum of Understanding with the Federal government to partner on 10,000 MW electricity projects in the country.
The multi-billion dollar agreement was consummated yesterday and calls for an investment of 20% equity by Daewoo whilst the balance will be arranged by the Federal government.
Daewoo will also serve as technical partner, providing expert advice and guidance on electrical, production and construction of power projects to companies wishing to do business in Nigeria under the agreement.
Minister of Power, Prof. Bart Nnaji signed on behalf of the government, while the President and CEO of Daewoo E&C, Mr. Sang-Real Kim, signed on behalf of his company at the event which took place at the Power Ministry’s Conference Room in Abuja.
“Today is a very important day for the relationship we want to create, ourselves and Daewoo and the people of Korea,” Nnaji said during his remarks to flag off the signing ceremony. “The president was in South Korea and he gave us opportunity to reach your company, in that 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.”
Nnaji further said that the MOU would change the old system of contractors coming to the country simply to work and get paid and the
go. “We are now making the power sector attractive for investment by international investors,” he said to the visiting Daewoo team, adding that it was now hoped that they will not only execute contracts but will also invest in the power sector under the MOU.
In his remarks, the Chairman of Daewoo E&C, Chief Joseph Penawou, expressed delight on behalf of his entire team at entering into the MOU with the Federal Government.
The MoU is unique in many respects. While previous MOUs have guaranteed 10-15 per cent equity or other forms of investment in the
reform-bound Nigerian power sector by the foreign party, Daewoo under the terms of its MOU will invest 20 per cent equity and in
various engineering and construction services in the Nigerian power sector.
It is the fifth MOU to be signed by the Nigerian government and various international investors since the launch of the Nigerian power
reform road map on August 26, 2010.
The other MOUs were signed with US Exim Bank to provide $15 billion credit to the Nigerian power sector and with Siemens of Germany to assist in the provision of 10, 000 megawatts 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.
The ceremony was witnessed by key staff of the ministry including the Minister of State for Power, Architect Darius Dickson Ishaku, and the Permanent Secretary, Dr. Dere Awosika.
The Daewoo Managing Director, Mr. Kim, was accompanied by the Chairman, Chief Joseph Penawou, the Head of Marketing, Mr. Ilesanmi Adekunle, and the Abuja Representative, Mr. Hassan Akpan.
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