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700MW Zungeru Hydro Plant Ready in 48 Months, Says FG

13 Dec 2012

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Minister of State for Power, Hajiya Zainab Kuchi

Chineme Okafor 

The Federal Government Tuesday said the 700 megawatts (MW) Zungeru hydroelectric power plant will finally come on stream in about 48 months time, following Nigeria’s signing of a contractual agreement with a consortium of Chinese power firms.

The project, which was initiated as far back as 1982 when its feasibility studies was initially conducted and submitted by a United States firm, Chas T. Main International and later reviewed in 2008 by French firm, Coyne et Bellier would  cost about N162,990,364,379.30 when completed and added to the national grid.

Its total funding outlay will, however, be shared between the Federal Government and Exim Bank of China in the ratio 25:75 respectively with Nigeria providing a counterpart funding contribution of $309 million that is already domiciled within the Ministry of Power.

Minister of State for Power, Hajiya Zainab Kuchi, who supervised proceedings at the Zungeru contract signing ceremony with the Chinese consortium, CNEEC-Sinohydro Consortium in Abuja, yesterday stated that the Ministry of Finance is expected to finalise all legal paper works to activate the 75 per cent funding from the Exim Bank of China for work at the project site to begin.

Kuchi explained that the government was equally keen on infusing the Nigerian local content practice into the project construction phase and has in this regard inserted a clause in the contract to this effect, adding that about 1,000 direct employment is expected to be generated in the construction phase.

She noted that the consortium will also have to work with Nigerian engineers notwithstanding their expected importation of limited expert personnel from China and that funds to offset the loan from Exim Bank of China will be generated from the plant as it begins operation.

“I am glad to welcome you to the formal signing ceremony of the contract agreement for the implementation of the 700MW Zungeru hydroelectric power project. Zungeru started a long time ago in 1982 with feasibility studies by Chas T. Main International.

“In 1992, the engineering design, preparation of tender documents, evaluation report, construction management and supervision of the project were awarded in favour of Hidroservice Engenharia Limited of Brazil and G.F Appio & Associate/Water and Dam Service Company,” she said.

Kuchi explained that: “The feasibility studies and engineering design was reviewed in 2008 by Coyne et Bellier and a report submitted which recommended that an installed capacity of 700MW consisting of 4X175MW plants units representing downward review of the initial capacity of 950MW should be adopted, the recommendation was accepted by the ministry.”

The minister also informed that the ministry had applied and got a due process certificate of no objection for the award of the contract to the consortium from the Bureau of Public Procurement (BPP) in October 2012 and subsequently got approval for the project commencement at the 44th meeting of the Federal Executive Council (FEC).”

She said: “With a completion period of 48 months including a defect liability period of 12 months, it is pertinent to mention that the total cost of the implementation of the project is USD 377,723,701.31 plus ¥3,701,664,848,66 plus N44,007,398,398.00 equivalent to N162,990,364,379.30. The source of funding is from an arrangement with the Exim Bank of China for 75 per cent of the project cost while counterpart funding balance in the sum of $309 million is currently available with the ministry of power.

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

Responding to a question on the likely status of the plant in a post-privatised power sector, Kuchi stated that it is expected that the Bureau of Public Enterprises (BPE) will put up the plant for sale in line with the power sector reform exercise, adding that the plant will boost economic status of small and medium scale industries and households around the country.

Executive Vice-President of Sinohydro Corporation, Mr Du Nan, in his remarks stated that the consortium will deliver the project within the contractual terms, affirming that it has the capacity to do same as stated in the terms of engagement.

Tags: Business, Nigeria, Featured, 700MW Zungeru Hydro Plant, 48 Months, FG

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