Mambilla Power Plant: The Same Old Story?

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Friday, April 23, 2021 / 03:04 PM  / By CSL Research / Header Image Credit: Construction Review Online


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A Punch report says there are indications that the construction of Nigeria's most ambitious power project; the Mambilla hydroelectric power plant, may be halted due to financing conditions faced by its major financier, China Export-Import Bank. In a document obtained by the print media source, a possible disagreement seems to have ensued between the government and the financier of the project, thus affecting the release of funds for the project.

 

The proposed 1,525 MW hydroelectric power plant has gone through murky waters. At inception, the project was designed to a capacity of 2,600MW during the Shehu Shagari led administration in 1982. However, in 2012, the capacity was increased to 3,050MW due to the expansion of the formerly called Gembu dam now Nya dam. Currently, the capacity of the plant has been revised to 1,525MW according to a statement credited to the Minister of Power, Sale Mamman, estimated to cost US$4bn from the initial US$5bn on the former 3050MW installed capacity.

 

Unfortunately, despite the country's huge endowment of hydroelectric potential, the state of electricity supply is very worrisome and continues to plague economic activities. According to a World Bank report, businesses in Nigeria lose about US$29bn annually arising from the country's erratic power supply. Following the privatization of the power sector, however, one would expect the nation's power sector to receive a new lease of life. Sadly, this has not been the case as the entire value chain of the power sector is disturbed with a plethora of issues that have continued to hinder the benefits associated with the privatization exercise.

 

Recently, there was a breakdown in transmission across the country as the Transmission Company of Nigeria (TCN) reported a breakdown in its facilities, just as the perennial concerns of distribution persists. In effect, this explains the need for any investment in the Nigerian power sector to cut across its value chain to curtail the continued surge in Nigeria's Aggregate Technical, Commercial, and Collections Losses (ATC&C) and other wastages.

 

Considering Nigeria's perennial romance with failed power projects, we are less optimistic about the near-term completion of the Mambilla power project. While there is no definite expenditure estimate on the project so far, a slight reduction of US$1bn from US$5bn to US$4bn compared with a 50% slash in plant capacity to 1,525MW capacity raises concern. Also, we reiterate the need for more investment across the energy value chain in Nigeria. While efforts are currently more centered on power generation, we are optimistic that more investment in transmission and distribution activities on the value chain can improve drastically, the state of power in Nigeria.


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Proshare Nigeria Pvt. Ltd.

Proshare Nigeria Pvt. Ltd.

Proshare Nigeria Pvt. Ltd.

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