The Chinese government has said it would not fund the Mambilla power
until Nigeria settles the legal dispute over the $5.8 billion project.
In 2006, the China Gezhouba Group Corporation of China (CGGCC) and
China Geo-Engineering Group Corporation (CGGC) had won the bid for a
joint venture to execute the hydropower project with a proposed
capacity of 3,050 megawatts, the single biggest power plant in
Nigeria.
Meanwhile, in 2003, the ministry of power had awarded the build,
operate and transfer (BOT) contract of the project to Sunrise Power
and Transmission Company Limited (SPTCL), a local content partner.
This was followed by the signing of a general project executionv
agreement (GPEA) with SPTCL in November 2012.
However, in November 2017, the ministry signed another engineering,
procurement and construction (EPC) contract with Sinohhydro
Corporation of China, CGGCC and CGGC to form a joint venture for the
execution of the project, excluding SPTCL.
As a result, SPTCL dragged the Federal Government and its Chinese
partners before the International Chamber of Commerce (ICC) in Paris,
France, over an alleged breach of contract.
Chief Executive Officer of SPTCL, Leno Adesanya claimed the company
had spent millions of dollars with financial and legal consultants to
raise about $6 billion for the execution of the project, yet the
company has suffered a lot over the years “through improper
administrative interruptions and interventions”.
Due to the ongoing legal tussle, Nigeria risks $2.3 billion fine over
the proposed 3,050-megawatts facility conceived in 1982.
In a letter dated September 18 to Sale Mamman, minister of power, seen
by online medium, The Cable, He Yongjun, project manager for the
Chinese partners, maintained that the China Exim Bank, which is
expected to provide 85 per cent of the joint funding, will not finance
the project until the
legal issues are resolved.
“The Chinese government is showing a positive attitude towards the
Mambilla Project. However, according to financing policy of China, the
Export-Import Bank of China cannot provide loans to a project with
legal disputes, which is the main reason why the project has not
entered into substantive financing negotiations so far,” Yongjun said.
“On 5th September, 2019, Yang Jiechi, Special Representative of
President Xi Jinping informed the Nigerian President and Commander in
Chief, President Muhammadu Buhari that unless the legal dispute is
resolved, conforming out of court settlement funding for the loan will
not be accessed.
“A meeting shall be organized by the Ministry of Power for
negotiations between the relevant authorities of the Nigeria
government, SUNRISE, and the members of the EPC Contractor JV to
resolve the legal disputes through amicable negotiations so as to let
the plaintiff withdraw the
lawsuit.”
