✕ CLOSE Online Special City News Entrepreneurship Environment Factcheck Everything Woman Home Front Islamic Forum Life Xtra Property Travel & Leisure Viewpoint Vox Pop Women In Business Art and Ideas Bookshelf Labour Law Letters
Click Here To Listen To Trust Radio Live
SPONSOR AD

Fresh hurdles hit Nigeria’s largest hydro power project

A source privy to the project’s planning in the Ministry of Power told Daily Trust that inability to harmonise financial plans by the power ministry…

A source privy to the project’s planning in the Ministry of Power told Daily Trust that inability to harmonise financial plans by the power ministry and its finance counterpart last year was the major setback that affected the project.
There were renewed efforts last year when President Goodluck Jonathan gave marching orders to the power ministry to ensure the flag off of the project before the end of 2014.
But when Daily Trust made enquiries on the delayed take-off, it was gathered that initially the Coordinating Minister of the Economy (CME),  Dr. Ngozi Okonjo-Iweala was not in the picture of the project, the reason for the halted last minute moves to flag off the much awaited electricity project in the North East Nigeria last October.
“What delayed the project kick-off initially was that the Finance Ministry was not incorporated in the early process, and the Federal Ministry of Power could not have signed a loan agreement with another country without the Finance Ministry, on behalf of Nigeria. They now had to ensure that our Finance Minister travels to china to perfect the agreement signing,” source said.
Updating Daily Trust yesterday on the delay, the official who was not authorised to speak on the project said, “She (CME) was about to go in December when all these crises started. The fall in oil price was the most critical issue because she had to stay back to ensure that there were measures in place to cushion the effect; and then election fever started. There was also a crisis about the ministries not getting money in the month of December, she had to stay back.”
In 2006, the Chinese firms CGC/CGGC won the Lot 1 tender for about $1.4bn while the contract was signed by May 2007 and later cancelled. The project consultant valued the cost at $3.2bn (about N653.7bn) in 2011, but it has encountered various hurdles since conception some 30 years ago.
But the new cost according to the Minister of State, Power, Hon. Mohammed Wakil, in a recent interview was about $5billion (about N1.021trn). This is a significant $1.8 billion (about N367.7bn) difference of an upward review from the initial transaction plan.
Wakil had given the October timeline during a political rally in Gombe State in September. He said, “The president has broken the jinx of the Mambilla hydro dam which is worth about $7billion. The dam is to generate over 3,000mw and is about the biggest on the continent.
“This project has been on the drawing board since 1970. This president has given marching order for the signing of the Mambilla hydro dam by this October,” he noted.
Its sister project, the 700mw Zungeru Hydropower station in Niger State was flagged off in May 2013, after the power ministry awarded the contract to China National Electric Equipment Corporation (CNEEC) and another Chinese firm, Sinodydro Nigeria Ltd at $1.2billion.
Giving the roots of the recent deadlock for the project’s signing last October, officials hinted that the newly contracted company,  -China Gezhouba Group Company Ltd – that built the 22,500mw Three Gorges Dam (world’s largest dam) in China, will work with the financier, the China EXIM Bank, to arrange the finance. He stated that the companies arranged for the 85 percent financing through the Chinese Bank while the Federal Government will provide its 15 percent counterpart funding; but the agreement is awaiting a formal pact signing on financing between Nigeria and the Chinese government, similar to the process for the Zungeru hydro project.
Speaking on what delayed the agreement process months after it should have been signed, the ministry official further said if the election had been held as scheduled, the entire process would have been clearer now. “But now that election is in March, it is not ideal for anybody to travel now for such major transaction.”

Join Daily Trust WhatsApp Community For Quick Access To News and Happenings Around You.

Do you need your monthly pay in US Dollars? Acquire premium domains for as low as $1500 and have it resold for as much as $17,000 (₦27 million).


Click here to see how Nigerians are making it.