Chinese construction firm wins $6bn Nigerian hydropower project
The Chinese Civil Engineering Construction Company has won a $5.8bn contract to build a hydroelectric power plant in Nigeria. The Chinese Export Import Bank will provide 85% of the funds, with Nigeria's federal government contributing the rest. The project, in the Gembu area, is expected to be completed in six years and will add 3,050 MW to the country's electricity generation capacity. The current poor state of power supply in Nigeria forces many households and businesses to generate their own power, adding to operating costs and leaving them reliant on imported fuel.
Chinese Civil Engineering Construction Company (CCECC) has been awarded awarded a $5.8 billion hydroelectric power plant. Minister of Power, Works and Housing Mr. Babatunde Fashola disclosed that the Chinese Export Import Bank will provide 85% of the funding, and the Federal Government will contribute the rest. The project has an expected completion period of 6 years and is located in the Gembu area of Taraba state.

Why it is a big deal

On completion, Nigeria will have 3,050 MW added to its generation capacity. Poor power supply in the country has resulted in businesses and households generating their own power. This adds to operating costs for businesses, and makes goods produced here less competitive compared to countries with less power. Diesel and petrol used to generate power are imported leaving users vulnerable to price increases and currency devaluations.

A sharp devaluation of the Naira last year lead to petrol prices increasing from N97 to N145 last year. The drop in oil revenues has left government struggling to fund essential projects, so the deal is a win- win situation for the country. The project had been in the pipeline since 1972, but was not implemented due to a lack of funds.

Concerns exist

Environmental activists have raised queries about the environmental impact of the project. Similar projects that were carried out, often lead to the displacement of entire communities, often with no compensation.

CECCC was established in 1979 by the Chinese government, and operates in several areas including international contracting for railway construction to civil engineering design & consultancy, real estate development, trading, industrial investment and hotel management as well. The company is currently handling several major projects Including the Lagos-Calabar rail project .