The Federal Government on Tuesday officially transferred operations of the Zungeru Hydroelectric Power Plant to Penstock Limited, instead of Mainstream Energy Solutions Limited which it selected in February 2023.
Tuesday’s move is expected to “boost Nigeria’s power generation capacity and contribute significantly to meeting the country’s growing energy demands,” a statement signed by the Senior Special Assistant to the Vice President on Media and Communications, Stanley Nkwocha, read.
The statement is titled ‘FG finally hands over Zungeru Hydroelectric power plant to concessionaire.’
It came one year after the National Council on Privatisation, on February 23, 2023, approved the appointment of Mainstream Energy Solutions Limited as the preferred bidder for the concession of the Zungeru Hydroelectric Power Plant.
However, The PUNCH observed that Penstock Limited was not one of the three companies shortlisted in December 2022 to present proposals for the concession.
That year, 11 consortiums had sent Requests for Qualification out of which three—NSP Consortium, Mainstream Energy and Africa Plus Partners—were shortlisted.
The 740MW Zungeru power facility located at the upper and middle reaches of River Kaduna in Niger State is the largest hydropower project in Nigeria. Though conceived in 1982, construction works only commenced in 2013 following a deal with two Chinese firms-China National Electrical Equipment Corporation and Sinohydro Consortium.
According to the Bureau of Public Enterprises, the project has gulped around $1.3bn, with a preferential loan facility from the Export-Import Bank of China.
With the FG providing 25 per cent funding for the project, the Exim Bank will fund 75 per cent with low-interest loans.
The facility is expected to produce 2.64bn Kwh of electricity annually and meet around 10 per cent of Nigeria’s total domestic energy requirements. It was commissioned in 2023.
At the first meeting of the NCP for 2024 held at the Presidential Villa, Abuja, the council announced significant progress in the Plant concession, including the official transfer of the plant’s operations to Penstock Limited.
The concession agreement was signed on December 13, 2023, by the BPE and Penstock Limited.
Following Council approval, the Concessionaire fulfilled its obligation by paying 50 per cent of the commencement fees on January 5, 2024.
The official handover ceremony took place on January 23, 2024, officially transferring the plant’s operations to Penstock Limited.
