Nigeria Seeks $10 Billion to Fund its Energy Transition Plans

Nigeria aims to raise an initial $10 billion in funding to implement its energy transition plan ahead of COP27 climate talks later this year, the country’s vice president said.

Africa’s most populous country needs at least an additional $10 billion a year and a total $410 billion to deliver on its net-zero targets by 2060, Vice President Yemi Osinbajo said during a virtual launch of the country’s energy transition road map. Nigeria has already secured a $1.5 billion pledge from the World Bank and is in talks with the US Export-Import Bank for an additional $1.5 billion, according to a government statement.

Osinbajo said that every African country has signed the Paris Agreement and some, including Nigeria, have announced net-zero pledges. But a lack of electricity “hurts livelihoods and destroys the dreams of hundreds of millions of young people.”


“For Africa, the problem of energy poverty is as important as our climate ambitions,” Osinbajo said in a video address. “Energy use is crucial for almost every conceivable aspect of development -- wealth, health, nutrition, water, infrastructure, education and life expectancy.”

Nigeria’s energy transition plan is designed to lift 100 million people out of poverty in a decade, drive economic growth, bring modern energy services to the people and manage the expected long-term job losses in the oil sector due to global decarbonization, according to the statement. 

By Anthony Osae-Brown

Bloomberg

Video - Nigeria Electric Scooters

A Nigerian based transportation company is leveraging eco-friendly technology to redefine how people move within gated communities. Their eco-friendly, two- wheeled scooters are providing affordable and fun means of transportation for users, while also making the environment free of harmful air pollutants.

Nigerian electricity union strike causes nationwide blackout

Striking electricity workers shut down Nigeria's power grid Wednesday, plunging the West African nation's more than 200 million citizens into darkness for several hours, officials said.

The nationwide blackout began in the afternoon moments after the union called a strike to protest non-payment of benefits for former members and other issues related to working conditions, the Transmission Company of Nigeria said.

“Several 330kV transmission lines and 33kV feeder lines across the power system network had been switched off by the union members resulting in ... multiple voltage escalations at critical stations and substations,” company spokeswoman Ndidi Mbah said in a statement,

Mbah said talks with the union had been underway for several days but had not been fruitful.

About 12 hours after the company's statement, power was restored in parts of the country after the electricity workers’ union said it called off the strike.

On social media, many people had voiced their anger and frustration over the strike, which they said worsened the plight of many businesses and homes already running on gasoline-powered generators as a result of inadequate electricity supply.

Such strikes in addition to the poor generation of power and the frequent collapse of the electricity grid have been blamed for the poor electricity supply that has been a decades-long challenge for many Nigerians.

As many as 92 million Nigerians lacked access to electricity in 2020, more than any other country in the world, according to the World Bank-backed Energy Progress Report 2022.

By Chinedu Asadu

ABC News

Nigerian cities in darkness as electricity grid collapses again

Nigeria’s wobbly national electricity grid has collapsed yet again, throwing several cities including the federal capital Abuja into darkness.

Electricity companies announced late Sunday that the collapse occurred just before 7pm.

It is the sixth reported collapse in 2022, although it is believed the figure could be higher.

The government blames poor management and low gas supply as the major causes of the repeated breakdown.

The Jos Electricity Distribution Plc informed its customers through its Facebook page on Sunday about the interruption in Electricity supply.

“The Management of Jos Electricity Distribution Company Plc wishes to inform the general public that the current outage being witnessed is a result of system collapse,” the head of corporate communication, Friday Elijah, said.

“We hope to restore supply as soon as supply is restored,” he added.

The Enugu Electricity Distribution Company Plc based in Enugu said, “EEDC wishes to inform her esteemed customers of a system collapse which occurred at 6.49pm this evening, Sunday, 12th June, 2022.”

The statement signed by spokesperson Emeka Ezeh said as a result of the development, all outgoing feeders were out and this has affected supply to its customers in Abia, Anambra, Ebonyi, Enugu, and Imo States.

“We are on standby, awaiting further information on restoration of supply from the National Control Centre (NCC),” he added.

Also the Eko Electricity Distribution Company said, “dear Esteemed Customer, we regret to inform you of the system collapse from the National grid. This has affected our entire network and impacted our ability to deliver optimum service.”

“Please bear with us as we are working with our TCN partners on a swift resolution. Power Outage In Our Franchise Due To Grid Collapse,” it concluded.

The spokesperson of the Kaduna electricity distribution company, Abdulazeez Abdullahi, passed the same message to customers.

“We regret to inform you that the power outage being experienced in our franchise states is due to System Collapse of the National Grid. The collapse occurred at about 18:47 pm this evening hence the loss of supply on all our outgoing feeders,” the notice said.

The company promised consumers that power will be restored as soon as the National Grid is powered back.


“Please be informed that the current power outage is due to a system failure from the National Grid. The system collapsed at about 6.49pm today 12th June, 2022, causing the outage currently being experienced,” the management of the Abuja Electricity Distribution Company said on Facebook..

“We appeal for your understanding as all stakeholders are working hard to restore normal supply,” it said.

After a similar collapse in April, the Minister of Power, Abubakar Aliyu, said the government had been making efforts to improve power supply.

Like past governments, the Buhari administration has so far failed to solve Nigeria’s perennial power problem.

By Oge Udegbunam 

Premium Times

Related stories: Nigeria runs on generators and nine hours of power a day

Increased Power Shortages Compounds Nigeria’s Fuel Scarcity Woes

Video - Nigeria's electricity generation crisis continues

Increased Power Shortages Compounds Nigeria’s Fuel Scarcity Woes

Nigerians are experiencing even less reliable electricity supply than usual amid gasoline scarcity that has caused long queues at gas stations for over a month in the West African nation.

In recent weeks, provision of power to Nigerian homes and businesses has been especially patchy, leaving them ever more reliant on expensive and polluting generators that run on gasoline and diesel.

The deterioration in the electricity supply is due to “very low power generation” by the nation’s power plants, the state-owned Transmission Company of Nigeria, or TCN, said last week. More than a dozen gas-powered facilities were either not operating or producing limited output at various points during the past two months, it said.

Nigerians are already contending with shortages of gasoline that have resulted in long queues outside filling stations for more than a month since the authorities rejected imported cargoes of the fuel for containing too much methanol.

More than 40% of the country’s approximately 200 million people don’t have access to grid electricity, according to the World Bank. Those that are connected to the grid endure frequent outages forcing them to rely on self-generated backup power with an estimated capacity of 40,000 megawatts.


The generation companies acknowledge they are struggling but attribute their current difficulties to the dilapidation of Nigeria’s transmission infrastructure -- the national grid collapsed twice in two days this week -- and years of being underpaid for their power. While the electricity plants could produce an average of about 7,100 megawatts between 2016 and 2021, the grid was able to receive less than 3,800 megawatts over the same period, according to the Association of Power Generation Companies, or APGC.


The power stations have lost out on 1.7 trillion naira ($4.1 billion) since 2015 by being unable to dispatch this “stranded capacity,” APGC Executive Secretary Joy Ogaji told reporters on March 13. The state-owned Nigerian Bulk Electricity Trading Co., or NBET, also owes the generation companies “huge sums” for electricity that was sent out to the grid and supplied to customers.

While data about the outstanding arrears owed to the generation firms wasn’t available, Nigeria’s electricity distribution companies paid NBET, which buys power from generating firms and sells it on, less than 30% of invoices worth 730 billion naira in 2020. This leaves NBET unable to remit full payment to its suppliers.

The government transferred most of Nigeria’s generation and distribution assets to private ownership in 2013, while retaining the transmission network and NBET under state control. The country’s privatization agency said last year it would propose the unbundling and sale of the TCN.

ByWilliam Clowes

Bloomberg

Related stories: Nigeria runs on generators and nine hours of power a day

Video - Nigeria's electricity generation crisis continues

Nigerian electricity commission busy restoring power after grid collapses on Sunday

Nigeria’s national electricity grid collapsed on Sunday, the Transmission Company of Nigeria (TCN) said in a statement.

Power outages in Nigeria, the most-populous nation in Africa, are common, but a system collapse is unusual.

TCN said it would conduct investigations to establish what caused the “multiple trippings” as soon as the grid was fully restored.

The nation’s power grid, along with the resulting precarious energy supply, is a key issue hindering growth in the continent’s largest economy.

Nigeria recently implemented its first power tariff increase in state-controlled prices since 2015. That doubled prices for some consumers, but the government and industry said it was needed to allow distribution companies to recoup costs and pay generating companies.

 CGTN 

Related stories: Nigeria runs on generators and nine hours of power a day

Video - Nigerian economy growing despite epileptic power supply

30 million Nigerians don't have access to electricity

Nigeria Approves Siemens Loan to Revamp Power Infrastructure

Nigerian President Muhammadu Buhari approved counterpart funding for a deal that will see Siemens AG upgrade the nation’s dilapidated power infrastructure. Nigeria, Africa’s most populous nation, last year contracted the German engineering company to rehabilitate and expand its electricity grid. Only about two-thirds of Nigerians have access to power and that’s plagued by constant blackouts.

Buhari, 76, granted “anticipatory approval” for 18.94 million euros ($22.2 million), or 15% of the cost, as counterpart funding for the project, Finance Minister Zainab Ahmed said. The balance will be provided by Euler Hermes Group SAS, backed by the German government, on concessionary terms with a three-year moratorium, a 12-year repayment period at “an interest rate of Libor-plus 1% to Libor-plus 1% to Libor-plus 1.2%.”

The project will be implemented in three phases to be completed by 2025, when Nigeria estimates its on-grid transmission capacity will reach 25,000 megawatts. The West African nation has an installed capacity of 13,000 megawatts, of which a daily average of only 4,500 megawatts is dispatched to consumers due to a poor transmission and distribution network.

In the first phase the system’s operation capacity will be increased to 7,000 megawatts while reducing the sector’s commercial and collection losses, Siemens said in a statement.

In June, lawmakers halted a hike in electricity tariffs meant to help state-owned traders repay power producers, who had threatened to halt operations. Originally planned for April, the hike was delayed by the electricity regulator over disruptions caused by the coronavirus pandemic.

The World Bank in June approved a $750 million loan for the government to overhaul its power sector. Electricity shortages have an economic cost of around $28 billion, or the equivalent of 2% of Nigeria’s gross economic product, according to the lender.

Bloomberg

Nigeria’s epileptic electricity grid collapses again

Nigeria’s national electricity grid, operated from Osogbo in Osun State, again collapsed Tuesday afternoon, leaving the entire country in darkness.

Managed by the Transmission Company of Nigeria, sources at the company confirmed the development to The Guardian as some distribution companies already notified consumers of total blackout.

The grid collapsed in May due to industrial unrest, after it had earlier collapse in April which heightened poor power supply.

Though TCN is yet to clarify the reason for the latest collapse, the grid recorded over eleven system collapse last year.

Association of Nigerian Electricity Distributors (ANED), the umbrella body of the distribution companies had last year decried the repeated system collapse, stating that TCN’s analogue system caused over 100 electricity grid collapses since the privatisation of the power sector in 2013.


The Guardian

Video - Solar energy gradually replacing diesel generators in Nigeria

With poor electricity supply from the national grid in Nigeria, most businesses and households in the country rely on generators for power. But as people tire of the noise and pollution, many are now turning to solar energy - an alternative that is cleaner, quieter and cheaper in the long run.

Related story: Nigeria runs on generators and nine hours of power a day

Nigeria runs on generators and nine hours of power a day

Kabir Sabo’s sewing machine hums busily as he hems a “babariga,” a popular dress in northern Nigeria, in his small corner shop on the outskirts of Abuja. It can hardly be heard over the sound of Nigeria’s worst problem.

Sabo’s noisy electricity generator costs him an average of 3,000 naira ($8.30) a day in fuel, he says. That’s the bulk of the roughly 4,000 naira he makes daily.

“When you are a small business owner in a country where there is no power, it really is depressing,” he said. “I have on multiple occasions shut down to take up a monthly paying job. It’s difficult to run the business when most of your earnings go on paying bills, buying fuel and all sorts of things.”

In Africa’s most populous country, almost everyone depends on generators, including President Muhammadu Buhari. His office will spend 46 million naira fueling generators this year. In the country’s 2019 budget, there are 1,358 generator-related expenses.

The shortage of power is one of the biggest issues Buhari faces as he tries to reform a $400 billion economy that is too dependent on oil exports, has too many inefficient state-owned enterprises and is still struggling to recover from a slump in 2016.

“Lack of access to electricity and unreliable electricity supply are key constraints to doing business in Nigeria,” the International Monetary Fund said in its latest economic report on the country. It estimated the annual economic loss at about $29 billion. In a 2014 World Bank survey, 27% of Nigerian firms identified electricity as the main obstacle to doing business.

Households with access to on-grid electricity had an average power supply of only 9.2 hours a day in the first half of 2019, according to a survey by the country’s leading polling agency, NOI Polls. Electricity production per capita is less than 15% of the average of emerging-market economies and less than 25% of the sub-Saharan Africa average, according to the IMF.

To keep out the darkness, households own and operate an estimated 22 million small gasoline generators, whose combined generating capacity is eight times higher than on-grid supply, according to a June 2019 presentation by Dalberg, a global policy and advisory firm. Businesses and individuals spend about $12 billion a year, twice the country’s annual infrastructure budget, fueling these generators.

Nigeria, which also has the continent’s largest gas reserves and ranks ninth globally, consumed an average 3,713 megawatts of electricity from the grid in 2018, data published by the country’s central bank shows. That’s about a 10th of what Eskom Holdings SOC Ltd. made available in South Africa, a country with less than a third of the population and which itself is subject to rolling blackouts.

Nigeria is only able to send about a quarter of its total power capacity to homes and businesses due to a poor and dilapidated power infrastructure, much of it installed in the 1980s. The country’s transmission lines can “theoretically” carry about 7,500 megawatts, according to the country’s electricity regulatory authority.

The irony is that Nigeria took the right steps in 2013 by disbanding its state-owned power company and breaking it into three different businesses; generation, transmission and distribution. The state sold the generation and distribution arms to 23 different owners and held on to the transmission lines.

This is similar to the solution now being proposed for Eskom. But Nigeria also shows how not to reform the power industry.

The government retained the right to determine tariffs through a regulatory agency, which raised power prices in 2015 -- and quickly reversed it as elections approached. Since then electricity tariffs have remained largely unchanged even as inflation has remained above the central bank’s upper target of 9% since 2015 and the naira is 50% weaker against the dollar.

Tariffs should go up by a minimum of 50%, according to the IMF, but maintaining prices at current levels has become a fiscal burden. Since 2015, the government has provided three bailouts via the central bank for the electricity sector, amounting to 1.5 trillion naira to plug revenue shortfalls.

It doesn’t help that power customers are often unwilling to pay for the electricity they consume. Distribution companies collected payments for only 64.1% of electricity supplied in the first three months of 2019, according to a report by Nigeria’s power regulatory agency. The distribution firms in turn paid for only 28% of power they received from generation companies and the transmission network.

Buhari’s 2017 recovery plan for the industry hasn’t made much progress, and now the government is proposing a staggered tariff increase from January. The proposal will rates by an average 27% for some users.

Increasing tariffs could lead to new investments, said Cheta Nwanze, an analyst at Lagos-based business advisory service SBM Intelligence.

“The problem is, transmission will still be in the hands of the government, which is inefficient and unable to make the required investment,” Nwanze said.

In Sabo’s small shop, he frequently deals with impatient customers whose clothing orders have been delayed because of long blackouts.

“I am willing to pay more if it means I will not have to rely on the generator to run my business,” he said. “Should I have that choice, I’d pay maybe two naira more.”

By Anthony Osae-Brown, Ruth Olurounbi, and Gordon Bell

Bloomberg 

Related story: Stable electricity supply foreseeable in Nigeria's future

Cryptocurrency could help light up Nigeria

Imagine being able to purchase clean energy cheaply and through cryptocurrency. Sounds futuristic? But it's a possibility that OneWattSolar, a startup based in Lagos wants to achieve.

The clean energy outfit has come up with a way of allowing thousands of Africans to pay for solar energy using blockchain tokens without having to pay for the solar system infrastructure, which is funded through financial backers. 

It was a concept Victor Alagbe, the company's vice president of operations and blockchain strategy, had been thinking on when reading about Elon Musk. 

"I did some writing on Tesla and so I thought it is sunny most of the time here, especially in the northern parts where it is quite arid," recalled Alagbe who is a former business writer.

"So why don't we use this to power our own electricity... many Nigerians cannot really afford to set up their own solar systems. 

"They can't afford the start up cost so most people would rather go for generators which is not economical when you think of maintenance costs," Alagbe said.

The idea behind blockchain payments

The aim is for customers to purchase tokens in the local naira currency using the platforms of third party tech finance companies. 

"It provides transparency, you can see the utilization of funds, how many systems we have purchased and how many are being used."

The tokens used have been built on the blockchain platform, Ethereum. 

On a traditional service using fossil fuels, energy usage is around 70 Nigerian naira ($0.19) per kilowatt. "But the blockchain system is 50 percent cheaper than diesel," claims Alagbe because the expensive maintenance costs of generators is mitigated.

Instead OneWattSolar's systems will include solar panels and a fitted internet enabled router that will automatically collect data on energy usage that is charged monthly on a pay as you go basis.

"This will ensure that customers are billed for exactly what they use," said Alagbe.

It is also hoped it will alert OneWattSolar to any potential problems with the systems in real-time.
Although the startup has only been eight months in the making, it's part of GoSolar Africa, a renewable energy company that's been operating in Africa since 2010. The plan is to launch in January 2019 with an initial 1,000 systems that are fully operational the company said. 

Around 41 percent of Nigerians have no access to electricity, according to the World Bank and it is these potential customers the startup is looking to connect. 

"So far there are 6,400 homes who have signed up to be put on our waiting list," said Alagbe.
According to him, the long term goal is to connect one million homes across Sub-Saharan Africa without electricity with solar energy through blockchain. It's hoping to achieve this by 2025.

Africa's renewable energy industry

The young tech company is part of a boom in the renewable energy industry across Africa.
A joint venture between Abuja based Motir Services Nigeria and US based DuSable Capital Management will power 180, 000 homes in Nigeria in a 100MW solar project worth $175m. 

In Morocco - the world's largest concentrated solar power plant called the Noor-Ouarzazate complex - will power more than one million homes when complete later this year. 

It is hoped the complex will decrease Morocco's dependence on oil by about 2.5 million tons per year and reduce carbon emissions by 760,000 tons per year in the country, according to the World Bank who has financed the project's construction.

Ghana is also gearing up its renewable energy capabilities. 

Earlier this year, the West African nation announced a goal of increasing renewable energy consumption from currently one percent to 10 percent of energy usage by 2030. 

While in October, Vice President Mahamudu Bawumia also announced that all government institutions would run on solar power to reduce energy consumption costs.

As African nations move towards cleaner and reliable energy, startups like OneWattSolar could prove profitable.

CNN

Video - Startup aims to tackle Nigeria's electricity problem

Having lived in other continents for years without electricity interruption, one Nigerian, Femi Adeyemo decided to return home to help, in his own small way, find a solution to the country’s notorious electricity challenge. In 2014, in collaboration with a friend, he founded Arnergy, a startup that deploys the use of solar technology to generate electricity. Today, solar technology is catching on very fast in Nigeria and Femi’s Arnergy is at the thick of things.

Video - Startup drives Nigeria solar revolution

Nigeria's perennial electricity challenge is a well-known fact. Power cuts are all too frequent in the country and most residents rely on petrol and diesel generators for their power supply. But in recent times solar technology is beginning to gain ground as a major source of alternative energy. Solar panels are now popping up on rooftops of buildings. Deji Badmus has been looking at one of the startups driving Nigeria's solar revolution.

Nigeria turns to renewable energy as population grows

Faced with a population boom that has sent carbon emissions soaring and stretched power supplies to breaking point, oil-rich Nigeria is turning to renewable energy in a big way.

Africa’s most populous country needs more than 10 times its current electricity output to guarantee supply for its 198 million people - nearly half of whom have no access at all, according to power minister Babatunde Fashola.

Campaigners welcome the shift to renewables as an efficient way to bring power to rural communities and help clean up a country with some of the world’s worst urban pollution rates.

“Ready access to electricity will reduce youth unemployment and increase productivity,” Ifeoma Malo, Nigeria country director at the global campaign group Power For All, told the Thomson Reuters Foundation.

“It will contribute greatly to reducing the carbon footprint of a growing energy demand by the urban population.”

Nigeria has set a target of expanding electricity access to 75 percent of the population by 2020 and 90 percent by 2030.

It aims to generate 30 percent of its total energy from renewable sources by 2030, Fashola said in a recent speech in London, a major commitment for an economy that depends heavily on fossil fuels.

Oil and gas production account for around 35 percent of Nigeria’s gross domestic product and about 90 percent of total exports revenue, according to the Organization of the Petroleum Exporting Countries (OPEC).

Over the past year, the country has invested more than $20 billion in solar power projects, seeking to boost the capacity of the national grid and reduce reliance on it by building mini-grids in rural areas without mains electricity.

Just one in four people in rural Nigeria is connected to the national grid, adding to a trend of outward migration that is piling pressure on Nigeria’s already overburdened cities.

POWER CUTS

Power demand in Nigeria’s largest city Lagos vastly outstrips supply, meaning its 25 million residents must either go without, or rely on expensive, fume-belching generators.

In January the country suffered six power outages in just eight days as the national grid repeatedly collapsed under the strain, plunging most of the country into darkness.

Urbanization and rapid population growth will only add to the problem - Nigeria’s population is projected to swell from 198 to 411 million by 2050, and more and more people are moving to its cities.

By the start of 2020, demand for energy is forecast to be more than double its early 2018 levels.

Nigeria currently has the capacity to produce an estimated 7,000 megawatts (MW) of power, but due to weak infrastructure, gas supply problems and water shortages only about 4,000 MW reaches the national grid, according to Fashola.

The government is investing in hydropower, with several projects close to completion.

The largest is the Mambilla Power Station in central Nigeria, a $5.79 billion project due to be completed in 2024 with most of the financing coming from Chinese lenders.


It will be able to generate 3,050 MW of renewable energy in the rural region, and is scheduled to be completed in 2024.

Given the country’s climate though, most of the focus is on generating solar power.

A $350 million World Bank loan will be used to build 10,000 solar-powered mini-grids by 2023 in rural areas, bringing power to hospitals, schools and households, said Damilola Ogunbiyi, managing director of the Rural Electrification Agency.

RURAL AREAS

One of these projects, Sabon Gari, aims to generate between 1-4 MW of solar energy for 12,000 small and medium-sized enterprises (SMEs) in Nigeria’s second largest city, Kano, by the end of the year.

The chief executive of the energy company behind the project, Rensource, said companies’ energy costs had fallen at least 30 percent since they started using the solar grids.

“Up until now, the entire market has been powered by a network of small-scale, dirty, unhealthy generators that are also quite expensive,” Ademola Adesina told the Thomson Reuters Foundation in a telephone interview.

“We are replacing those generators with a network of solar hybrid systems that are powering the entire market.”

Rensource hopes to expand to rural areas, where the World Bank estimates 80 million Nigerians live without electricity.

Power For All’s Malo said small-scale projects such as these offered the best chance of bringing power to remote areas.

“The Rural Electrification Agency realizes that the traditional, public-sector-led grid extension system will not meet the demands of the growing population,” he said.

Reuters

Video - Nigerian government plans to hike energy tariffs to attract investors

Nigeria plans to hike energy tariffs by 2021 in a bid to attract more investment and improve power supply. Nigeria's electricity sector has remained unattractive to investors due to power tariffs set by the government which are below the cost electricity generation.

Video - Nigeria's Power Woes: Interview with CEO and Chairman of Genesis Energy Holdings

Why does a country with the ninth largest proven gas reserves on the planet have a crippling electricity deficit? On September 10, 560 MW of gas generation capacity was offline, and the country's sector regulator estimated losses attributable to that lack of power, at $3.5 million. 

That figure doesn't take into account the enormous amount of gas wasted through gas flaring. Earlier, CGTN's Ramah Nyang debated this subject with Akinwole Omoboriowo II, CEO and Chairman of oil, gas, and power firm, Genesis Energy Holdings.

$5.8 billion hydropower deal announced in Nigeria

The government of Nigeria has announced the award of a $5.8 billion contract to build what will be the largest power plant in the country.

The 3,050-megawatt Mambila hydroelectric power project in the state of Taraba will be delivered by a consortium of Chinese state-owned construction firms.

The megaproject will feature four dams between 50 and 150 meters tall, and take six years to complete, the Minister of Power, Works and Housing, Babatunde Fashola, told reporters in Abuja.

The Chinese Export-Import Bank will finance 85% of the development, with the Nigerian government contributing 15%.

Minister Fashola claimed the project will deliver far-reaching benefits.
"(Mambila) will have a transformational effect on all of Nigeria's socio-economic development," he said through a government spokesman, "It will have considerable positive impact on electricity supply nationwide, productivity, employment, tourism, technology transfer, rural development, irrigation, agriculture and food production."

False starts

The Mambila hydropower plant has been in development for over 30 years, but previous administrations have made little progress.

In 2007, the Nigerian government awarded a $1.4 billion contract to two Chinese construction firms for a 2,600-megawatt plant, but the agreement broke down soon after.

Attempts were made to revive the deal without success. But the deadlock was broken by conversations between the presidents of China and Nigeria in 2016, according to the spokesman of Nigerian President Muhammadu Buhari.

"The major breakthrough in the execution of this project was achieved when President Muhammadu Buhari initiated discussions at the level of the President of the Peoples Republic of China in the course of his State Visit (in 2016)," wrote government official Garba Shehu.

The meeting resulted in the creation of a consortium of Chinese companies to deliver the project, according to Shehu, and an agreement that the Chinese government would commit finance to it.

Power shortage

Despite being one of the largest economies in Africa, over 40% of Nigerians live without access to electricity, according to World Bank figures.

Hydropower, one of the cleanest and cheapest forms of power, is a key target for development as Nigeria is currently exploiting just a fraction of its potential resources.
The country is also seeking to shift away from oil dependency, after plummeting oil prices triggered a recession.

The clear need for the Mambila project could make it more likely to succeed, some analysts believe.

"The prospects of project implementation starting are perhaps stronger than in previous decades," says Elizabeth Donnelly, deputy head of the Africa Programme at UK think tank Chatham House. "Nigeria continues, albeit slowly, with its complex power sector reform and badly needs to generate - and more importantly distribute - more power for its 180 million people."

"Hydroelectricity is an important part of this mix, particularly for rural electrification."

Risk factors

The location of the development could lead to complications.

"There is strong competition for land in Taraba state, which regularly sees outbreaks of ethno-religious violence," says Donnelly. "Such a project, with its need to resettle people, could considerably worsen the conflict dynamics and humanitarian situation in the state."

Environmental groups have also raised concerns about the potential impact.

"If the Mambila dam project does continue, it could mean disastrous environmental and social impacts for those already living in poverty along the banks of the Benue River," warned NGO International Rivers,

The Nigerian government says that 100,000 people will be displaced by the development, and has pledged to resettle and compensate them.

Taraba state Governor, Darius Dickson Ishaku, has welcomed the project for its potential to boost tourism and agriculture.

Chinese interests

The power plant is one of several major Chinese investments in Nigeria, including multiple railway projects.

In January, Chinese Foreign Affairs Minister Wang Yi announced plans to invest a further $40 billion in Nigeria.

"Nigeria is seen as an important power that China wants good relations with," says Yun Sun, a scholar of Chinese foreign policy at US think tank, The Stimson Center.

Sun adds that the primary motivation is financial. Investments such as the Mambila power plant make good business sense.

"Nigeria is using Chinese banks to hire Chinese companies for the project, which will create profits and jobs," she says. "China also wants to identify large projects that make it look good and (Mambila) falls into this category."

But while China is likely to gain from the deal, Sun sees higher risk on the Nigerian side.
"I am less optimistic about the financial impact on the Nigerian economy as the project is very large and there is a question about how Nigeria will repay the 85% finance from the Export-Import Bank," she says. "There could be implications for the national debt."

CNN