After the approval for another $5.5bn loan request to be used to refinance budget deficit and complete some rail projects, the Minister of Power, Works and Housing, Babatunde Fashola, has announced that the Federal Government had commenced negotiations for a $4.92bn loan from the China Exim Bank for the construction of the 3,050 megawatts Mambilla Hydro Power Plant.
The minister stated that the Federal Ministry of Finance had taken over the process that would ensure the release of the fund to Nigeria so that work can begin on site.
Only last Friday, the Federal Government signed the contract for the construction of the hydro power plant with a consortium of three Chinese firms, namely, China Gezhouba Group Corporation, Sinohydro Corporation Limited and CGCOC Group Company Limited.
Part of the key determinations at the ongoing negotiation on the loan include the terms of the loan, and the negotiation will further determine when work will start.
Fashola noted that “The signing of the contract for the construction had taken place last Friday. It is supposed to be funded by the China Exim Bank. The negotiations for the loan will now start. For this period, I am waiting because it is now the Ministry of Finance that has taken over. They are the ones who do treasury works and raise loans for Nigeria.
“So, we do the negotiations, and when we secure the loan, then we are able to tell you that this is the start date. There is a lot of preparatory works going on and we should have signed aMoU with the Taraba State Government. We have already got a liaison office in the state, the governor did that.
“We also constituted the project team; the contractors have already started route estimation and analysis, how they are going to move heavy equipment and all of that; and there will be a lot more of that to come. It is a big contract”
Business Hilights recalls that the government had signed the agreement for the construction of the Mambilla plant in six years with the Chinese consortium in Abuja last week.
Work is expected to begin as soon as issues bordering on the facility and percentage of local content involvements are concluded, a source in the Ministry confided in our Abuja Bureau Chief on Thursday to avoid some ugly experiences in some ongoing jobs handled by Chinese companies with facility from China.
