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Mamman: Why FG reduced Mambilla power project to 1,500MW from 3,500MW

Mamman: Why FG reduced Mambilla power project to 1,500MW from 3,500MW
July 06
23:00 2021

Saleh Mamman, minister of power, says the federal government reduced the capacity of the Mambilla power project from 3,500 to 1,500 megawatts to ensure adequate funding by lenders.

In 2019, Zhou Pingjian, the former Chinese ambassador to Nigeria, said his country would not support white elephant projects.

Pingjian had advised Nigeria to promote direct participation of the Chinese government or companies in some of its projects to reduce much borrowing and facilitate easier execution of projects.

Mamman said this on Tuesday when he appeared before the senate committee on power.

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He said the project capacity was adjusted to 1,500 megawatts to conform with current market realities and for lenders to accept it.

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

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

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“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 the bankability of the project. What we did was to redesign the project to be bankable and acceptable to the lenders.”

On why the ministry awarded N812 million to Taraba State government for surveying and demarcation of land where the project would be sited, the minister said it was based on agreement with 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 added.

In 2017, the federal government signed the $5.8 billion Mambilla power plant contract to Messrs China Gezhouba Corporation, Sinohydro Corporation Limited and CGOC Group Limited.

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The project is presently a subject of litigation after Sunrise Power Transmission Company of Nigeria Ltd (SPTCL) filed lawsuits against the federal government for “breach of contract”.

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