The federal government has handed over the $1.3 billion Zungeru Power Plant to Mainstream Energy Solutions Limited in a move to stabilise the national grid and increase it to 13,000 megawatts.
The grid-connected electricity is currently 12,200 megawatts and the new development will increase the total number of power plants on the grid to 27.
Zungeru with 700mw capacity is approximately $1.3 billion, and reportedly, the largest power project completed in Nigeria over the past decade. Additionally, it stands as one of the most significant power ventures in Africa to secure a preferential loan from the Export-Import Bank (Exim Bank) of China.
The handover, conducted by the Bureau of Public Enterprise (BPE), has turned Nigeria’s MELS into the largest hydropower company in Africa with above 2,000MW. This comes against projections by the World Bank that output from most of the hydropower plants handled by the company may not generate more than 40 percent.
The Acting Director General of BPE, Ignatius Ayewoh, while presenting the certificate to MESL, said under the concession agreement, the Federal Government was required to hand over the hydropower plant to the concessionaire not later than 10 business days from the date of payment of 50 per cent of the commencement fees following which the transition plan as set out in the schedule shall apply.
“The Bureau is, therefore, pleased to inform you that upon the execution of the concession agreement, and within 15 working days after the execution, the concessionaire has accordingly effected the payment of the first tranche 50 per cent of the commencement fee in the sum of N67.2 million on January 5, 2024, to the Federal Government,” he stated.
Ayewoh noted that the conclusion of the concession remained a crucial step towards enhancing the efficiency and effectiveness of the power sector.
According to him, the choice of concession as a strategy would ease the repayment of the loan facility from the China Export-Import Bank.
Managing Director of Mainstream, Audu Lamu, noted that the development would drastically reduce the current instability of the national grid.
He said the addition of 700MW of clean energy remained critical for Nigeria as part of measures to deal with the environmental impacts of burning fossil fuel, adding that the development would take away the challenges associated with gas plants.
Disclosing that the company is increasing the capacity of Kainji Dam to 980 megawatts, as Jebba is currently about 578.4 megawatts, Kashimbilla at 40 megawatts and now Zungeru at 700MW.
He stated that the company would move into the plant today and would work with the Transmission Company of Nigeria to ensure that the project comes to the grid as soon as possible.
Source: InsiderBusiness