FG Approves $1.72 bn Counterpart Funding for Hydro Dams

The Minister of Power, Prof. Chinedu Nebo

by: Chineme Okafor

The Minister of Power, Prof. Chinedu Nebo, has disclosed that the National Economic Council (NEC) has approved a total of $1.72 billion as part of Nigeria’s counterpart funding for the construction of three major hydroelectric power stations in the country.

Nebo stated recently at the groundbreaking of the 700 megawatts (MW) hydroelectric power plant in Zungeru, Niger State by President Goodluck Jonathan that with the approval, initial work at the project sites would now commence without funding hindrances on the part of Nigeria.

The hydroelectric projects earmarked for construction by the government within its long-term development plan for Nigeria’s power sector include: the 700MW Zungeru plant to be constructed at a project sum of N162.9 billion by Chinese consortium of Synohydro and China National Electrical Engineering Corporation (CNEEC), the 3050MW Mambilla hydroelectric plant located in Taraba State also to be built at the sum of about $3.2 billion by China Gezhouba Group Company and Synohydro and the Gurara II dam, which will gulp about N37 billion.

For Mambilla and Zungeru, they are expected to be undertaken on a Build, Operate and Transfer (BOT) concession agreement with counterpart contributions of 15 per cent and 25 per cent respectively. The Exim Bank of China will provide outstanding funding percentages required to construct the power projects which are also expected to yield returns for repayment of the concessionary loans.

When completed, Mambilla will become the largest single hydro power project in the country; the proposed contracting structure for Mambilla stipulates that Messrs Sinohydro will cover 70 per cent of the project while Messrs CGGC Limited (China Gezhouba Group Company) covers 30 percent of the project scope.

Nebo said at the inuaguration that design and funding mechanism for all the major hydro power schemes were now in place.

“Today, we have in place not just the designs but the funding mechanism of all the major hydro schemes in the country. With the recent approval of $1.72 billion counterpart funding for the sector by the National Economic Council, not just Zungeru, but Mambilla dam in Taraba and Gurara II dam in Suleja, Niger State will all soon see the light of the day,” Nebo said.