FG, Chinese consortium sign N163bn power plant contract

 

Minister of State for Power, Mrs. Zainab Kuchi

The Federal Government and a consortium of two Chinese firms on Tuesday signed the contract for the execution of the Zungeru hydro power plant.

The consortium is made up of China National Electric Engineering Company and Synohydro Corporation.

The Minister of State for Power, Mrs. Zainab Kuchi, signed the contract worth N162.99bn on behalf of the Federal Government, while the Vice Executive President, Synohydro, Mr. Du Nan, signed on behalf of the consortium.

When completed, the hydro plant to be located 77 kilometres from the Shiroro hydro power plant, is expected to add 700 Megawatts of electricity to the national grid.

Kuchi said the project would be completed in four years, adding that it would create 1,000 job opportunities for indigenes of the area.

The journey to the implementation of the Zungeru project started in 1982 with feasibility studies carried out by Chast T. Main International.

In 1992, the engineering design, preparation of tender document report, construction management and supervision of the project were awarded to Hidroservice Engenharia Limited of Brazil and G.F Appio & Associates and Dam Service Company.

The feasibility studies and engineering design were reviewed in 2008 by Coyne et Bellier and the report recommended an installed capacity of 700MW consisting of four 175MW plant units.

The acceptance of the report meant a downward review of the initial capacity of 950MW.

While the Ministry of Power applied and obtained Certificate of No Objection from the Bureau of Public Enterprises in October 2012, the Federal Executive Council approved the award of the contract to CNEEC-Sinohydro at its 44th session.

The completion period of 48 months includes a defect liability period of 12 months.

Although the total cost of construction was put at N162.99bn, there are three components made up of $377.72m; N44.01bn and 3.7 billion Chinese Yuan.

The minister said the source of funding was from an arrangement with the Exim Bank of China for 75 per cent of the project cost, while a counterpart funding of $309m was already available from the Ministry of Power.

She said, “It is expected that the infrastructure would generate sufficient revenue for the repayment of the loan. The consortium agreement is structured to ensure that the parties are to be jointly and severally responsible for the full implementation of the project.

“On the completion of the project, a total of 700MW of electricity would be added to the national grid, leading to an increase in power delivery to small and medium-scale industries and households, thereby enhancing sustainable power supply to the country.

“In addition, the project has the prospect of enabling multiple commercial activities expected to take place in Zungeru and its environs, such as building projects, agriculture, and food processing industry as well as generating thousands of jobs for the Nigerian economy.”

On post construction management of the plant, Kuchi said it would have to be privatised like other power plants in the country that were currently being sold to private sector operators.

The Permanent Secretary in the ministry, Dr. Dere Awsika, expressed delight at the signing of the contract; adding that it had been long in coming.