By Faridat Salifu
In a significant development aimed at bolstering Nigeria’s energy sector, the Federal Government has formally transferred the operations of the $1.3 billion Zungeru Hydroelectric Power Plant to Penstock Limited.
The announcement was made during the inaugural 2024 session of the National Council on Privatisation (NCP), which held at the Presidential Villa in Abuja, recently.
The transition marks a pivotal moment in Nigeria’s quest to enhance its power generation capacity to meet the nation’s growing energy demands.
Facilitated by a $1.3 billion loan from China, the newly constructed 700-megawatt plant situated in Zungeru, central Nigeria, and is expected to significantly augment the country’s power generation capabilities.
Key milestones in the handover process include the signing of the Concession Agreement on December 13, 2023, between the Bureau of Public Enterprises (BPE) and Penstock Limited. Subsequently, on January 5, 2024, following Council approval, the Concessionaire fulfilled its obligations by remitting 50% of the commencement fees.
It was gathered that the official handover ceremony, signaling the transfer of the plant’s operations to Penstock Limited, took place on January 23, 2024.
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Providing context, the Bureau of Public Enterprises (BPE) had previously granted the concession to Mainstream Energy in February of the preceding year. Under the terms of the agreement, Mainstream Energy is mandated to remit $70 million annually to the Nigerian government over a period of three decades in exchange for operational rights to the plant.
Commenting on the development, Audu Lamu, CEO of Mainstream Energy, remarked, “This is where the real work starts in ensuring that the asset is managed in accordance with international standards.”
Notably, the Kainji and Jebba hydroelectric plants, managed by Mainstream Energy, jointly produce 1,338 megawatts, contributing approximately 33% to Nigeria’s current power generation capacity of 4,000 megawatts.
Crucially, the Zungeru plant stands as Nigeria’s largest hydropower project and ranks among the continent’s most substantial power initiatives to secure preferential loan financing from the Export-Import Bank (Exim Bank) of China.
The Zungeru hydropower project is poised to deliver not only electricity generation but also flood protection and irrigation water, serving as a multifaceted asset for the nation.
Projected to generate 2.64 billion kilowatt-hours (kWh) of electricity annually, the 700-megawatt Zungeru hydropower plant is expected to satisfy nearly 10% of Nigeria’s total domestic energy requirements.
As Nigeria strides forward in its efforts to fortify its energy infrastructure, the handover of the Zungeru Hydroelectric Power Plant represents a significant milestone in the nation’s pursuit of sustainable development and energy self-sufficiency.
