Nigeria’s government has settled a legal dispute surrounding the proposed construction of what is expected to become Africa’s second-largest hydropower plant.
The Mambilla facility, complex of dams on the Donga River in the eastern Taraba state, will produce 3,050 MW, equivalent to a quarter of Nigeria’s current installed capacity.
Nigeria’s power minister, Sale Mamman, was quoted saying that International arbitration in Paris initiated by Sunrise Power and Transmission Co., a company that once held the construction contract, was recently resolved, clearing the main obstacle to the plant’s construction.
“We have now overcome the major problem stopping this project and it is nearly over,” Mamman said in an interview in Abuja, the capital.
A consortium including China Energy Engineering Corp. and Sinohydro Corp. Ltd will build the Mambilla facility, which is forecast to cost $4.8bn, about $1bn less than earlier estimates, Mamman said.
The minister said he expects the Chinese firms to start construction this year, an ambition listed by Buhari in his New Year’s speech to the nation.
The Nigerian government was accused by Sunrise of breaching its 2003 agreement when it granted a separate contract to Chinese companies four years later and was seeking an arbitration award of $2.3bn, risk advisory group Songhai Advisory LLP said in a note in January.
The legal wrangle caused the Export-Import Bank of China to pause its interest in financing the Mambilla plant, it said.
The only bigger hydro power facility in Africa is Ethiopia’s 6,000 MW Grand Ethiopian Renaissance Dam, which was started in 2011 and is now more than five years behind schedule.
The Democratic Republic of Congo’s government also has a dam, which is still under construction. It will be capable of producing as much as 11,000 MW.