Nigeria: Govt Pressures China On $5.8bn Loan for Mambilla Power Project

13 November 2019

The Federal Government is mounting pressure on the Chinese Embassy to ensure that the Chinese Export Import Bank (EXIMBANK) releases its part of the $5.8 billion funding for the 3,050-megawatt (MW) Mambilla Hydropower project in Taraba State.

The Ministers of Power and Water Resources, Engr. Saleh Mamman and Alhaji Suleiman Adamu respectively, visited the embassy in Abuja recently, along with the Minister of State for Power, Mr. Goddy Jeddy-Agba.

Adamu told the Chinese officials that the environmental impact assessment exercise was being carried out, and that the federal government and Taraba State has agreed on compensation payment to land owners at the project site.

He also said the Ministry of Justice was already working on a comfort letter to be presented to the China EXIMBANK backing Federal Government's commitment to release an interim counterpart fund of $200m by the Nigerian Sovereign Investment Agency (NSIA).

Daily Trust recently reported that the project is hit by several arbitrations that had stalled it for over 40 years. The Chinese government asked Nigeria to settle the legal disputes before the EXIMBANK could release its part of the funding.

In November, 2017, the ministry, under Babatunde Fashola, signed a fresh Engineering, Procurement and Construction (EPC) joint venture contract with Sinohydro Corporation of China and CGCOC, but excluded the local partner, Sunrise Power and Transmission Company Limited (SPTCL). That has attracted lawsuits.

The water resources minister, last Thursday, confirmed the ongoing arbitration with a previous investor but assured that government would indemnify any funds agreed after the arbitration without affecting the loan agreement with EXIMBANK.

The Power Minister, Engr. Mamman, assured that the Chinese government had nothing to fear as the Federal Government was committed to the project.

Mamman's spokesman, Aaron Artimas, said he insisted that the Chinese government had enough influence to impress on EXIMBANK to hasten the process as the project could not be frustrated by any arbitration.

The Chinese Ambassador to Nigeria, Dr. Zhou Pingjian, said his country does not encourage white elephant projects.

He said EXIMBANK was already investing over $2.6bn in various projects in Nigeria, including the Abuja Greater Water Project, airport expansion and the Abuja-Lafia-Makurdi Highway.

However, he assured that although the Chinese government would not push EXIMBANK, it would try its best to impress on the bank to meet its commitments.

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