Reason Why There’s Zero Allocation For Mambilla Power Project In 2024 Budget – FG

Reason Why There’s Zero Allocation For Mambilla Power Project In 2024 Budget – FG

The Minister of Power, Adebayo Adelabu, has clarified the absence of provisions in the 2024 budget for the Mambilla Hydro-Power plant project in Gembu, Taraba State, which has a potential capacity of generating over 3,050 Megawatts (MW) of electricity.

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In response to the omission reported by Daily Trust, Adelabu explained that the project is currently under arbitration, preventing the federal government from progressing with it.

The minister made this statement on Monday during the 2024 budget defense session organized by the Senate and House of Representatives Joint Committee on Power.

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Sunrise Power and Transmission Company Limited (SPTCL) took legal action against the Nigerian government on October 10, 2017, at the International Court of Arbitration administered by the International Chamber of Commerce (ICC) in Paris, France. The dispute revolves around a 2003 agreement to construct the 3,050MW Mambilla plant in Taraba state, valued at $6 billion, under a “build, operate and transfer” basis.

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The federal government contended that the contract award was irregular and lacked due process, leading to litigation that has stalled the project. Adelabu emphasized that the deliberate exclusion of allocations in the 2024 budget for the project reflects the ongoing arbitration, indicating that progress would be impeded until a resolution is reached.

He said: “For Mambilla, there is no provision for it in 2024. It isn’t a mistake. It is deliberate. It is under international arbitration. Until it is resolved, we can’t do anything about it.”

The minister however said the Zungeru Hydro Power Project in Niger State was 99.8% completed.

“It is almost completed and we intend to start operation this year and commence evacuation to the national grid. Immediately concessionary fees are paid; we will start full operation,” he said

The minister informed the lawmakers that the primary challenge in the power sector lies not in generation but in distribution. He highlighted that a significant portion of the power generated is lost during the distribution process.

He identified poor infrastructure as the root cause of the issue, emphasizing that the facilities of the current power distribution companies are outdated and require upgrading.

“In the process of transmission to distribution, we lose power because of the distance of travel.  You lose close to 40% when you move from the area of transmission to distribution.

“So, we need to make an enormous investment in the distribution chain. What we are trying to do going forward is to expand our transmission facilities,” the minister said.

Adelabu also reiterated his call for the unbundling of the distribution companies, saying the states must be involved in power distribution.

“The DISCOS must be closely monitored by the states. I propose that they must be unbundled.

“Even when it comes to transmission lines, the states are well placed to secure the right of way for us,” he added. 

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