Business Hilights
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How insurgency botches 700MW schemes in Adamawa

Apart from displacing millions, deaths and collapse of businesses and infrastructure, another big loss trailing escalation of insurgency in the North East and mainly Adamawa State is the forced suspension of two critical power schemes.

These include planned building of N183bn solar power plants and the upgrade of Kiri Dam for power purpose.

It would be recalled that in November last year; a consortium of German renewable energy companies led by Nigus had concluded plans with the Federal Government to build five solar power plants worth N183bn ($600m) in some North-Eastern states with major concentration at Adamawa.

The Nigerian Investment Promotion Council (NIPC) said that each of the solar power plants will have capacity to generate 100 megawatts of electricity which means about 500MW on delivery.

The Head of Overseas Operations at NIPC, Mr. Abubakar Yerima, said, “After several meetings and agreements, we had a MoU signed in the United Kingdom, which led to the event of today. Nigus is coming with a complete value chain. The LTI Re Energy is part of the investment and this company (LTI) is one of the largest power firms in Europe, it is a German company”.

“Nigus is going to start in Adamawa State, because the radiation there is one of the highest in the country. They will set up their solar farm and beside this farm, LTI will set its production line, making it a complete value chain. In each of the places that they are setting up their plants, they will generate 100MW.

“They will start with five locations and then expand; so, we are looking at 500MW for a start. As soon as they get the licences, they will start setting up their plants and the NIPC has met the necessary agencies in the power sector with respect to this. We are now in the final stages of the Power Purchase Agreement being approved.”

Though he stated that insurgency would not frustrate the investors, stressing that despite the tense security concern in Afghanistan, some investors still invested in the troubled country, one year after, nothing was heard about the scheme, meaning that the investors may have fled.

Business Hilights recalls that the Chief Sales Officer of LTI Re Energy, Mr. Chris Voet, one of the core investors had assured in November last year that the first 100MW plant should be ready by March 2017.

But six months after, no story to tell on the foreign direct investment.

On Kiri Dam, efforts to speak with the Secretary to the Adamawa State Government, Dr. Umar Bindir failed as when he picked his calls, he said he was in a meeting with the governor.

The Kiri Dam is in Guyuk local government area of Adamawa State in the north east of Nigeria, damming the Gongola River. It is a 1.2 km long, 20 m high zoned embankment with an internal clay blanket. The dam was mainly completed in 1982. The reservoir has a capacity of 615 million m³.

An assessment of the dam in 2004 rated its condition “good”.

In October 2008 the United States Trade and Development Agency issued a request for proposals on constructing a 350 MW hydro-electric power plant at the dam.

The scenario therefore means that the nation is losing well over 700MW in Adamawa due to insurgency.

Besides, additional investigations on the Kiri Dam showed that it was built to provide irrigation for the Savannah Sugar Company (SSC), a large-scale sugar cane plantation and processing company set up as a joint venture between the Nigerian Federal Government and the Commonwealth Development Corporation (CDC), London. The CDC was managing agent for the project, and the construction contract was awarded to NECCO, a company largely owned by the government.

However, the Savannah Sugar Company was acquired by Dangote Industries in 2002. In 2009 the company owned 32,000 hectares of land near the dam of which 6,330 were in use and employed about 5,000 people. The company was producing about 50,000 tons of sugar annually, supplying the Nigerian market which consumes 1.1 million tons each year. Over 1,000 hectares of irrigated rice and other crops were being grown using the company’s canals.

29,000 hectares of land were expropriated without compensation, eventually displacing 20,000 people.

Resettlement assistance was inadequate. The dam has affected the lower reaches of the Gongola River. Flood peaks dropped from 1,420 m³/second to 1,256 m³/second, while flows in dryer seasons increased from 5.7 m³/second to 21 m³/second. The river downstream from the dam has narrowed and become less winding, with fewer separate channels.