In a strategic move aimed at enhancing Nigeria’s power generation capacity, the Federal Government officially transferred the operations of the Zungeru Hydroelectric Power Plant to Penstock Limited on Tuesday. This decision marks a deviation from the previous selection of Mainstream Energy Solutions Limited in February 2023.
A statement signed by Stanley Nkwocha, the Senior Special Assistant to the Vice President on Media and Communications, emphasized the anticipated boost to Nigeria’s energy sector, highlighting the significant contribution the Zungeru Hydroelectric Power Plant is expected to make towards meeting the country’s growing energy demands.
The selection of Penstock Limited comes after a series of developments in the concession process. Despite not being among the three companies shortlisted in December 2022 for proposals, Penstock Limited emerged as the chosen concessionaire, succeeding Mainstream Energy Solutions Limited.
The Zungeru Hydroelectric Power Plant, boasting a capacity of 740MW, holds the distinction of being Nigeria’s largest hydropower project. Despite its conception in 1982, construction commenced in 2013 through a collaboration with Chinese firms, emphasizing the international cooperation involved in its development.
With an estimated investment of around $1.3 billion, primarily funded through a preferential loan facility from the Export-Import Bank of China, the project aims to significantly contribute to Nigeria’s energy production, generating 2.64 billion kWh of electricity annually and fulfilling approximately 10% of the nation’s domestic energy requirements.
The official transfer of the plant’s operations to Penstock Limited formalized through a Concession Agreement signed on December 13, 2023, marks a milestone in Nigeria’s energy sector development. The commitment demonstrated by Penstock Limited, evidenced by the payment of 50% of the commencement fees on January 5, 2024, underscores the readiness to assume operational responsibility.
In addition to the Zungeru Hydroelectric Power Plant concession, Vice President Kashim Shettima, chairing the National Council on Privatisation (NCP), unveiled plans for the recapitalization and restructuring of the Bank of Agriculture (BOA). Highlighting the pivotal role of the BOA in achieving national food security, Shettima emphasized the need for modernization and leveraging technology to enhance its effectiveness in supporting agricultural development.