‘Makurdi hydro power will address Nigeria’s power challenge’

Hydropower resource

The Minister of Power, Abubakar Aliyu, yesterday, said the 1,650 megawatt (mw) Makurdi Hydro Power Plant (MHPP) when completed will not only address the energy shortfall in Nigeria, but also mitigate flooding. 

Speaking at the inauguration of the Project Steering Committee (PSC) for the concession of the power plant in Abuja, the Minister assured that the Federal Government is committed to addressing the power challenge in the country even as he said the present administration had embarked on various projects to address the energy crisis. 

Also speaking, the Minister of Water Resources, Suleiman Adamu, urged all players in the power sector to work in synergy to achieve stable power supply nationwide.

Earlier, the Director-General, Bureau of Public Enterprises (BPE), Alex Okoh, observed the severe shortages Nigeria has suffered in electricity supply in the last three decades, noting that with an estimated population of over 200 million people, peak power production in 2022 hovered around 3,000 – 4,500 MW. 

BPE in a statement, quoted Okoh as saying: “these shortages have had   an extremely negative impact on the economy’s ability to grow and the people’s quality of life, hence the   obvious need for serious interventions to remedy the situation.”

He noted that successive governments in Nigeria in the past embarked on projects and programmes to address the challenges, including privatisation and sector reform programmes.

This is aimed at encouraging private investment and participation in the power sector, to augment government’s efforts and interventions in an environment of severe fiscal (budgetary) constraints.

…the development of the project will contribute towards a sustainable and enduring solution to the power supply shortages in Nigeria.

Generation capacity

According to him, the Nigerian Electricity Regulatory Commission (NERC) has projected an increase in electricity generation capacity to 25,000MW by the year 2025 with an estimated peak demand of 32,000MW.

“When suppressed demand is factored in, demand is expected to grow to over 60,000MW by the year 2030 if Nigeria is to meet its economic growth aspirations. This projected supply deficit presents an opportunity for Private Finance Initiatives (PFI) in the Nigerian Electricity Supply Industry (NESI),” he added.

On the Makurdi Hydro Power, the Director-General recalled that in 2009, Interaf Power Development Company Ltd. (IPDC), the promoter of the plant, approached the Federal Ministries of Power and the Water Resources, respectively, to explore possibilities and modalities of developing the project.

“Consequently, Messrs Makurdi Hydropower Project Company Limited, a joint venture of IPDC and Sinohydro Corporation Limited, produced an Outline Business Case (OBC) for the development of the Makurdi Hydro Power Dam, and the associated power evacuation facilities on a Public Private Partnership basis,” he stated.

Okoh added that the MHPP, having been submitted to the BPE in December 2021 by the two Ministries, was screened and found eligible for PPP procurement. Hence, it was listed in the Bureau’s work plan for 2022, as approved by the National Council on Privatisation (NCP), and the OBC has been re-certified by the Infrastructure Concessions Regulatory Commission (ICRC).

He said that thereafter, the NCP at its November 14 meeting, approved the governance framework for the transaction as well as the constitution, membership, and terms of reference of the PSC for the transaction in line with the provisions of the ICRC Act 2005, and the National Policy on Public Private Partnership (N4P) 2009.

“Being an unsolicited proposal, in line with ICRC regulations and international best practice, the NCP also approved the use of the Swiss-Challenge methodology for the PPP procurement of the project, to ensure that the government obtains value for money.

“The Swiss Challenge method involves the inclusion of other qualified investors in the bidding process. If at the end of the bidding process, the proponent is not the most responsive bidder, it will be given the right to match the most responsive bid to win the concession.

“However, if it is unable to match the most responsive bid, the most responsive bid becomes the winning bid and the project proponent is compensated for investments made developing the project,” he explained.

He expressed optimism that the development of the project will contribute towards a sustainable and enduring solution to the power supply shortages in Nigeria and congratulated the members on their appointment. 

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