FG: Why We Reduced Mambilla Power Project from 3,500MW to 1,500MW

 

The Minister of Power, Engr. Sale Mamman on Tuesday justified the reduction in the capacity of the Mambilla power project from 3,500 megawatts to 1,500 megawatts, saying it was to ensure adequate funding by lenders.

Minister disclosed this while appearing before the Senate committee on Power said capacity of the power project was rescoped to 1500 megawatts to make it bankable and acceptable to the lenders.

He said: “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.

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


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

In his speech, Chairman of the committee, Senator Gabriel Suswam, asked the Minister to account for the N812 million the federal government paid to the Taraba State government for surveying and demarcation of land where the project would be sited.

Suswan said the ministry must account for how the money was used since it given by the federal government adding that “it is left for you to ask the Taraba government to furnish you with the details of how the N812 million was spent”.

A member of the committee, Senator Yusuf A. Yusuf, however, expressed concern that paying the money to the state government would make it impossible for the Senate panel to oversight how the money is spent.

He said: “We can’t appropriate money for land survey and demarcation for Mambilla power project and the money is given to Taraba government to engage land surveyors. This is make it difficult for the Senate to oversight the usage of the money”.

Responding, the Minister said the money was paid to Taraba State government based on the agreement between the state and 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 said.

The $5.8 billion Mambilla power plant in Taraba State planned over three decades ago was designed to generate 3,050 megawatts of electricity.

In 2017, the federal government approved the construction of the project to a Chinese state firm.

China’s Export-Import Bank will provide 85 percent of the funding and Nigerian government will supply the remaining 15 percent for the joint venture.


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