FG, China sign N207bn pact on Zungeru project .. rakes in N398bn on PHCN privatisation
Federal government on Saturday signed $1.3 billion (N203 billion) contract for the Zungeru Hydro-Electric Power Project with the Chinese government, to add 700 megawatts of electricity to the National Grid upon completion.
Chinese Ambassador to Nigeria Mr Deng Boqing signed on behalf of his country while Ambassador Godknows Igali, Permanent Secretary, Ministry of Power represented the minister, Professor Chinedu Nebo.
The Coordinating Minister for the Economy and Minister of Finance, Dr Ngozi Okonjo-Iweala, who supervised the ceremony, said the contract will be executed by a consortium of two Chinese companies - China National Electric and Engineering Corporation (CNEEC) and SinoHydro.
She said the loan is captured in the 2012-2014 Medium Term Borrowing Plan approved by the National Assembly.
The total cost of the project is $1, 293,573,013.08. Seventy five percent of the cost will be financed by a loan provided by the China Eximbank while the federal government has already paid 25% counterpart fund.
The loan is obtained at a highly favourable concessional terms: 2.5% interest rate with a seven year grace period and 20 years maturity.
Dr Okonjo-Iweala explained that the project will have significant positive impact in many areas, stressing that “it would create thousands of jobs for Nigerian engineers, technicians and artisans during the construction phase directly and indirectly. It would also boost the local economy of Zungeru as well as its environs.”
She stated that President Goodluck Jonathan had given all ministries and agencies involved in the project strict marching orders and that he expected it to be executed according to schedule.
“We are grateful to the Chinese government for making this project a reality and we hope that the cordial relationship between Nigeria and China will continue to grow stronger for our mutual benefit.”
Meanwhile, the federal government says it has so far realized as proceeds a total of US$2, 525,824,534 (about N398 billion) from 14 successor power companies scheduled for handover to the new owners.
Out of the amount, US$1,256,000,000.00 (about N200 billion) was realized from the 11 Distribution Companies (DISCOs) while the six Generation Companies (GENCOs) raked in US$1, 269,824,534 (about N203 billion).
President Goodluck Ebele Jonathan will handover share certificates and licenses to the 15 new owners of PHCN successor companies who have made 100 percent payment of the respective bid amounts. The presentation, which is scheduled for today at the Banquet Hall of the Presidential Villa, Abuja, is part of the build up to the activities to mark the 53rd Independence anniversary of Nigeria.
This information is contained in a statement from Head, Public Communications of the Bereau for Public Entreprises (BPE) Mr. Chigbo Anichebe. According to the statement, The federal government has equally set aside about N384 billion to settle labour liabilities.
The Electric Power Sector Reform Implementation Committee (EPIC) was set up in 2000 with the key mandate to proffer an appropriate legal and regulatory framework for the sector.
This gave birth to the National Electric Power Policy which was approved by the Federal Executive Council in September 2001; followed by the passage of the Electric Power Sector Reform Act of 2005. The passage of the Act gave the NCP/BPE the legal impetus to set up the Nigerian Electricity Regulatory Commission (NERC) also in 2005.
The NCP/BPE went further to vertically unbundle the integrated monopoly into three segments of Generation, Transmission and Distribution. As part of the reform initiative, NEPA was transformed into Power Holding Company of Nigeria (PHCN) in compliance with Section 1 of EPSR Act as a prelude to the full unbundling of the utility into different successor companies.
To further give teeth to the reform, in August 2010, President Jonathan launched the Presidential Roadmap on Power Reform with two key advisory organs, namely, the Presidential Action Committee on Power and the Presidential Taskforce on Power. The Presidential Roadmap is a comprehensive plan aimed at the reform and restructuring of the power sector to achieve stable electricity supply in the country
The Bureau published advertisements for expressions of interest by prospective investors in the eleven distribution companies and six generation companies between December 13 and 20, 2010, in both local and international media.