africa

Why FG reduced Mambilla power project to 1500MW from 3050 – Minister


The Minister of Power, Saleh Mamman, has said the Federal Government reduced the capacity of the Mambilla hydro power project from 3,050 to 1,500 megawatts, to guarantee return on investment.

The minister spoke when he appeared before members of Senate Committee on Power.

The $5.8bn power plant in Taraba State was conceived to generate 3,050 megawatts of electricity.

The Federal Government in 2017 approved the construction of the project by a Chinese firm.

Under the agreement, China’s Export-Import Bank was expected to provide 85 per cent in debt financing while the Nigerian government was expected to provide the remaining 15 per cent.

Mamman, said the capacity of the power project was reduced to 1500 megawatts to make it bankable and acceptable to the lenders.

He said, “We discovered that the 3050 megawatts is not feasible. We sent officials to China to review the project and the memo is on the table of Mr President waiting for approval.

“The idea of re-scoping the project is to make it bankable. The market that we are operating today in Nigeria is different from the market that was operated when the Mambilla project was conceived.

“Today, we need a project that can be paid for in the market. We are funding the project with loan from a lender who is only interested in funding a project that can pay back the loan.

“Most of the issues around the Mambilla power plant are on bankability of the project. What we did was to redesign the project to be bankable and acceptable to the lenders.”

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Meanwhile, the Chairman of the Committee, Senator Gabriel Suswam (PDP, Benue) said the minister must account for the N812m which the Federal Government paid to the Taraba State Government for surveying and demarcation of land where the project would be sited.

Also, Senator Yusuf Yusuf (APC, Taraba) expressed concern that paying the money to the state government would make it impossible for the Senate panel to oversight how the money was spent.

He said, “We can’t appropriate money for land survey and demarcation for Mambilla power project and the money is given to Taraba government to engage land surveyors.

“This is make it difficult for the Senate to oversight the usage of the money,” the senator said.

Responding, the minister said the money was paid to Taraba State Government based on the agreement between the state and the Federal Government.

“We entered into agreement with the state to support it with money to engage firms, based on the local procurement process, to survey and demarcate the land it donated for the project,” he said.

Suswan, however, said the ministry must give account of how the money was used since it was given by the Federal Government.

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