The federal government would part-fund the
construction of the 3,050 megawatts (MW) Mambilla hydropower generation
project with N2 billion in its 2020 budget cycle, details obtained from the
2020 budget document have shown.
The government would also invest N400 million in
the 11 electricity distribution companies (Discos) as part of its efforts to
improve their capacities to distribute more volumes of electricity generated by
power generation companies (Gencos) in the country.
The planned investment in the Discos would,
according to the budget document, be channeled to enable the Discos take up and
distribute about 2000MW of power the Gencos said is currently stranded in their
system and unable to get to the national grid because the Discos reportedly
have challenges taking them up.
Captured under the heading EGRP10109723, the N2
billion expenditure counterpart funding for 3,050MW Mambilla hydro power
project is expected to be part of Nigeria’s 15 per cent contribution to the
construction of the hydro plant which is said to cost $5.72 billion.
On August 30, 2017, the Federal Executive Council
(FEC) approved the award of the contract for the construction of the project to
Messrs China Gezhouba Corporation (CGC), Sinohydro Corporation Limited and CGOC
Group Limited.
Then in November of the same year, the then
Minister of Power, Mr. Babatunde Fashola, signed the $5.72 billion contract
with the firms. Fashola also said in November 2018 that ministry of finance was
concluding negotiation for the financing of the hydropower project with the
Chinese Export Import (EXIM) Bank. The bank was to fund it by up to 85 per cent
while Nigeria provides the balance of 15 per cent as its counterpart
contribution to it.
While the project delivery timeline is about 60
months, Fashola in the past also indicated that the government had in its 2018
and 2019 budgets made provisions for the counterpart funding of the project.
The 3,050MW Mambilla hydropower project was
originally conceived as a 2,600MW capacity hydro plant, however, it has
remained unimplemented for about 40 years, and had been subjected to a couple
of controversial phases.
Meanwhile, the government planned intervention in
the Discos may start with its inclusion in the 2020 budget, N400 million as a
capital expenditure item with the tag: EGRP10143939; expansion and
reinforcement of infrastructure in 11 distribution companies to reduce stranded
generation capacity.
Fashola, had also explained earlier in the year
that the government, which retained 40 per cent shares in the Discos, would
invest up to N72 billion in their distribution networks to boost power supply
through the installation of transformers, breakers and new lines.
He had at the time said majority of the problems in
the country’s electricity market were at the distribution end, hence the
decision of the government to intervene with the N72 billion investments.
“The federal government as a 40 per cent holder of
equities has decided to invest in the Discos. Already, we have approvals to
invest N72 billion. These approvals have been submitted to the cabinet office
as they come through to the Federal Executive Council (FEC). We would see
improved capacity,” Fashola had said on a television show then.
Furthermore, the budget document indicated that the
government would spend N200 million on the 215MW Kaduna power plant, which has
remained incomplete despite repeated promises of completing it. Another N210
million was budgeted for the 10MW Katsina Windfarm, which is yet to be
completed as well as N150 million for the controversial Afam fast power project
which was learnt had been abandoned by its contractors on grounds of poor
financing.
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