There were indications on Wednesday that finding $4bn has substantially stalled the construction of Nigeria’s most ambitious power project – the Mambilla Hydroelectric Power project in Taraba State.
The first sign that the project may have run into a financial alley was in was in February when the Minister of Power, Sale Mamman, tweeted that the capacity of the Mambilla project had been revised downward by 50 per cent.
This means that instead of a capacity of the original 3,050 megawatts, the plant had now been revised to 1,525MW. This was to enable the country to save $1bn. The original project cost was $5bn.
Officials of the power ministry told our correspondent on Wednesday that discussions on funding for the project had been ongoing.
They, however, noted that the major financier for the project had laid down some conditions before funds would be released for one of the country’s largest power project.
In a report on the project seen by our correspondent, the government noted observed that finance was hampering the project.
It also hinted at a possible disagreement between the government and the financier of the project, the China Export Import Bank.
The report said, “The project may therefore be considered stalled only in a narrow context based on the China Exim Bank conditions for releasing financing, however, the project is making progress in the wider context.”
The government also stated that the Project Delivery Committee of Mambilla Hydroelectric Power plant was established by the President, Major General Muhammadu Buhari (retd.), in February 2020 to fast-track the Mambilla project implementation.
It stated that since inception, the PDC had been very active in addressing key challenges facing the Mambilla project, stressing that the arbitration issue was one of them.
“Some of the ongoing activities by the PDC include ensuring critical project development activities such as land acquisition (site survey, enumeration and valuation) as well as project review to improving project bankability,” it stated.
The government stated that all these were ongoing, adding that the project was not stalled despite the perceived delay in its full take-off and the release of financing.
It said, “In addition, the project pre-commencement activities are in preparation working with the project consultants and contractors to give full effect to FGN (Federal Government of Nigeria) local content policy consideration.
The government stated that its intention to proceed with the Mambilla project had already been made clear by the Presidency.
It noted that Nigeria as a sovereign state had several options to fund its bankable projects, including the Mambilla project.
It said, “Thus the Federal Government has focused on making sure the Mambilla project is bankable in order to increase the chances of securing funding for the project both through local and foreign sources.
“However, the preferred option remains Exim Bank of China under a bi-lateral sovereign loan.”
The media aide to the power minister, Aaron Artimas, confirmed to our correspondent that other aspects of work on the project, such as site survey, moves to pay compensation, among others, were being handled currently.
It explained that funding for the $4bn project could be considered stalled in a narrow context based on the China Exim Bank conditions for releasing financing.
On Monday, The PUNCH exclusively reported that the Federal Government was currently subjecting the 50 per cent reduction in the Mambilla project installed capacity to an independent review.
The project has dragged on for decades, as senior government officials stated that it had been on for close to about 40 years.
When completed, it will be the largest power-generating installation in Nigeria, and one of the largest hydroelectric power stations in Africa.
Although the sighted document was silent on the contentious conditions demanded by the Chinese bank, our correspondent gathered that it might not be unconnected with local content involvement.