Kano — The Kano State government says feasibility studies have begun on the establishment of a 450 mega-watts electricity plant through the independent power project initiative which is to cost about $700m.

Chairman of the state govern-ment's power committee, Pro-fessor Abdu Salihi, told Daily Trust yesterday in Kano that agreement had been reached for the financing of the project which is expected to solve the energy problem in the state.

Under the agreement, he said, the state government would provide 15 per cent of the cost, POSCO E&C of Korea would give 20 per cent, while the remai-ning 65 per cent would be provi-ded by a consortium of banks.

He said the environmental impact assessment and the feasibility studies for the project would be completed by Decem-ber, adding that the plant would provide adequate power supply to the state.

"Although we have not reached the conclusion on finan-cing, we are using the industry standard of $1.4m per megawatt as yardstick," he said.

"We have thought about using gas option to generate electricity, but we realise that would take us to 2013 and we cannot wait. So we are now deci-ding to use turbines that can be fired with LPO and fuel, this is the position we are in now."

Salihi said the state government was also looking at the possibility of establishing additional power stations that would be started through the hydro power option.

For this, he said, already ano-ther agreement was signed with Aqua Energy of Norway which would generate 10 megawatts electricity at the Tiga and Chal-lawan Goje dams.