The Federal Government has formally handed over the operations of the $1.3 billion Zungeru Hydroelectric Power Plant to Penstock Limited.
The announcement was made on Tuesday at the inaugural 2024 session of the National Council on Privatisation (NCP), held at the Presidential Villa in Abuja.
It is projected that this transition will significantly increase Nigeria’s power generation capacity, thereby helping to meet the expanding energy requirements of the country.
The newly built 700-megawatt plant in Zungeru, central Nigeria was facilitated by a $1.3 billion loan from China.
- The Concession Agreement was signed on December 13, 2023, by the Bureau of Public Enterprises (BPE) and Penstock Limited.
- Following Council approval, the Concessionaire fulfilled its obligation by paying 50% of the commencement fees on January 5, 2024.
- According to reports, the official handover ceremony took place on January 23, 2024, officially transferring the plant’s operations to Penstock Limited.
Backstory
In February of last year, the Bureau of Public Enterprises (BPE) granted the concession to Mainstream Energy. Under the agreement, Mainstream Energy is obliged to pay the Nigerian government $70 million annually for three decades in exchange for operating the plant.
The CEO of Mainstream Energy, Audu Lamu stated,
- “This is where the real work starts in ensuring that the asset is managed in accordance with international standards,”
The Kainji and Jebba hydroelectric plants, managed by Mainstream Energy, collectively produce 1,338 megawatts, contributing approximately 33% to Nigeria’s current power generation capacity of 4,000 megawatts.
What you should know
- The Zungeru plant is Nigeria’s largest hydropower project and ranks among the biggest power initiatives across Africa to secure a preferential loan facility from the Export-Import Bank (Exim Bank) of China.
- The Zungeru hydropower project will provide power generation, flood protection, and water for irrigation.
- The 700-megawatt (MW) Zungeru hydropower plant is estimated to generate 2.64 billion kilowatt-hours (kWh) of electricity a year, which will meet close to 10% of Nigeria’s total domestic energy needs.
