Senate probes funds allocated for Zungeru hydro project since 2013, seeks suspension of planned concession

Oredola Adeola

The Nigerian Senate has called for the suspension of the planned concession of 700 Megawatts (MW) Zungeru hydroelectric power plant in Niger, by the National Council on Privatisation(NCP) and the Bureau of Public Enterprises (BPE), insisting that Nigerians deserve an explanation on how to recoup the huge annual budgetary allocations made to the project over the years, particularly on the measure being put in place to effectively manage unsettled China EXIM Bank’s external loans tied to the project.

The Senate made the request after the adoption of a motion advanced by Sen. Gabriel Suswam (PDP-Benue) and Sen. Abdullahi Yahaya (PDP-Kebbi) on Wednesday’s plenary.

EnergyDay’s check showed that the Federal Government through the National Council on Privatization, NCP, during its December 2020 meeting, approved the concession of the $1.3 billion Zungeru Hydroelectric power plant(ZHPP).

Dr. Abdullahi, who is also the Senate leader, while presenting the motion, tagged “the need for Senate intervention in the ongoing bid to concession Zungeru hydroelectric power plant in Zungeru, Niger State”, revealed that the Federal Government should first manage unsettled external loans tied to the project before releasing the assets to the concessionaire.

He said, “The contract for Zungeru hydro plant, which is the second largest hydroelectric plant in Niger after Kanji Hydropower station was originally awarded in 2013 in the sum of 1.3 billion dollars.

He said, “Over N43 billion was allocated to the project in the 2022 budget and another N76.5 billion was proposed by the executive in the 2023 budget.

“We need to establish whether the proposed concession of the Zungeru plant was an exercise that would ensure that the government gets the deserved value for funds expended and that community-related issues do not arise.

“Apart from the huge loan secured by the Federal Government from Exim Bank to fund the construction, the National Assembly has since the commencement of construction work on the plant approved billions of naira annually.

The Senate Leader further noted that the project was expected to have been completed within 60 months from the date of execution of the contract in 2013, but several factors have threatened the speedy completion of the project.

He however suggested that the Senate’s intervention was based on the need to ensure accountability for the huge annual budgetary allocations made to the project over the years, especially on the issue of managing unsettled external loans tied to the project.

He said there was a need to establish whether the proposed concession of the Zungeru plant was an exercise that would ensure that the government gets the deserved value for funds expended and that community-related issues do not arise.

The Senate in its resolution on the motion mandated its committee on Power to investigate the circumstances and conditions under which the 700 MW power plant was to be concessioned.

It also mandated the committee to investigate the completion level of the project, management of external loans from the Chinese Exim Bank tied to the project, and the fate of unsettled host communities where the project was sited.

The Government’s actual plan was to leverage the private sector through the concession of the facility to access finance and reduce reliance on Nigeria’s budgetary allocation to fund the China EXIM Bank loan, as well as leveraging efficiencies and better facility management (maintenance) culture of the private sector for long-term preservation of the asset.