Budget: FG Allocates N2bn to 3,050MW Mambilla Power Project


*  Supports Discos’ capacity expansion with N400m

Chineme Okafor in Abuja

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 hydro power 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 the 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 THISDAY learnt had been abandoned by its contractors on grounds of poor financing.