The Zungeru Power Plant

It is no secret that Nigeria is plagued with infrastructural challenges. There are numerous projects scattered across the country that have been left to waste away due to either poor implementation strategy, policy inconsistency or the absence of a maintenance culture. However, one project that cannot afford to suffer the same fate is the Zungeru Power plant.

This project is a 700MW hydroelectric power plant located in Niger State. There are concerns about the         lack of infrastructure to evacuate the generated electricity and transmit same to the national grid. Considering the parlous state of electricity supply in the country, it is our opinion that this critical issue ought to be addressed urgently.

We appeal to the authorities concerned not to allow the Zungeru Power plant to waste away like other projects in the country. It is an understatement to say that this project is crucial to the economic growth and development of Nigeria. The power generated from this plant will go a long way in addressing the power deficit in the country and is capable of impacting positively on the livelihood of the people and businesses.

Zungeru Hydroelectric Power Station is the second-largest hydroelectric power station in the country, surpassed only by the 760 megawatts (1,020,000 hp) Kainji Hydroelectric Power Station. The facility is expected to produce 2.64 bn Kwh of electricity annually capable of meeting about 10 per cent of Nigeria’s total domestic energy requirement. The project was completed in November 2023 and was concessioned to Penstock Limited.

Zungeru lies about 66 kilometres (41 miles), by road to Minna, the capital of Niger State. This is approximately 221 kilometres (137 miles), by road, to Abuja, the capital city of Nigeria. This power station is located between Shiroro Hydroelectric Power Station (upstream) and Jebba Hydroelectric Power Station (downstream).

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The energy generated is expected to be evacuated via two high voltage lines: (a) a 132kV line to Kainji Dam and (b) a double circuit 330kV line to connect to the line between Shiroro and Jebba dams. The power will subsequently be integrated into the Nigerian electricity grid.

The project cost has been reported to be $1.3 billion. Of that amount, 25 percent is sourced from the government of Nigeria, and 75 per cent is a loan from the Chinese government, through the Exim Bank of China. Construction started in 2013, with an initial completion date of 2018.

The Zungeru power station, when operational, is expected to add 2,640 GWh to the national grid, annually. This is equal to approximately 10 percent of installed national generation capacity as of January 2022. The project was completed in November 2023. And by January, the federal government officially transferred operations of the Zungeru Hydroelectric Power Plant to Penstock Limited, a subsidiary of Mainstream Energy Solutions Limited, which it selected in February 2023.

The Concession Agreement was signed on December 13, 2023, by the Bureau of Public Enterprises (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.

It is pertinent to emphasise that 75 percent of the financing of the project was a loan from the Exim Bank of China, while the federal government provided 25 percent. This means that the Nigerian government has a responsibility to ensure that this project is successful so as to be able to repay the loan.

With this debt overhang, the government ought to feel obligated to take urgent steps to address the infrastructure deficit and ensure that the generated power is transmitted to the national grid. This may require the construction of transmission lines and other necessary infrastructure. The government must also ensure that Penstock Limited is adequately equipped to manage the power plant and that there is no mismanagement of funds.

In our considered opinion, the Zungeru Power plant is too important to be allowed to waste away abandoned like some other equally strategic projects in the country. It is trite to state the strategic significance of electricity in the economic advancement of any nation. Substantially, it makes the difference between development and lack of it. With regular supply of electricity, the challenges of industrialization and unemployment can be addressed in a meaningful way.

With this in mind, we are compelled to urge the government to put every machinery in motion towards actualizing the potential of Zungeru power project. Specifically, the government must get Penstock Limited to fulfill its side of the agreement just as we expect that the government itself will see the urgent need to remove bureaucratic bottlenecks capable of hampering the coming on stream of the power project. The positive impact this plant can have on the economy cannot be sufficiently stressed.