Huge hope is now placed on the 1,650mw Makurdi Hydro Power Plant (MHPP) to bridge the energy shortfall in the country and also mitigate flooding when it is completed .
Power production has hovered around 3,000 – 4,500 MW in 2022 but the country needs 30,000 mw for current demand.
Minister of Power Abubakar Aliyu speaking at the inauguration of the Project Steering Committee (PSC) for the concession of the Power Plant in Abuja on Monday said the project is of the several by the Federal Government to address the power challenge in the country.
It will be recalled that Interaf Power Development Company Ltd (IPDC), the promoter of Makurdi Hydro Power Plant (MHPP) in 2009, approached the Federal Ministry of Power and the Federal Ministry of Water Resources, respectively, with the aim of exploring possibilities and modalities of developing the Makurdi Hydroelectric Project.
Consequently, Messrs Makurdi Hydropower Project Company Limited (a Joint Venture of Interaf Power Development Company Limited (IPDC) and Sinohydro Corporation Limited) produced an Outline Business Case (OBC) for the development of the Makurdi Hydro Power Dam, and the associated power evacuation facilities on a Public Private Partnership basis.
It will also be recalled that the MHPP was submitted to the Bureau of Public Enterprises (BPE) in December 2021 by the Federal Ministry of Power, and Federal Ministry of Water Resources, and found eligible for PPP prcurement and was subseqently listed in the BPE’s work plan for 2022 by the National Council on Privatisation (NCP) and the OBC has been re-certified by the Infrastructure Concessions Regulatory Commission (ICRC) after it was screened.
In furtherance to the ICRC’s revalidation of the OBC, the NCP at its meeting on November 14, 2022, approved the governance framework for the transaction as well as the constitution, membership, and terms of reference of a Project Steering Committee (PSC) for the transaction in line with the provisions of the ICRC Act 2005, and the National Policy on Public Private Partnership (N4P) 2009.
Being an unsolicited proposal, in line with ICRC regulations and international best practice, the NCP also approved the use of the Swiss-Challenge methodology for the PPP procurement of the project, to ensure that government obtains value for money. The Swiss Challenge method involves the inclusion of other qualified investors in the bidding process. If at the end of the bidding process, the proponent is not the most responsive bidder, it will be given the right to match the most responsive bid to win the concession. However, if it is unable to match the most responsive bid, the most responsive bid becomes the winning bid and the project proponent is compensated for investments made developing the project.
Director General of the Bureau of Public Enterprises (BPE), Alex A. Okoh expressed optimism that the development of the project will contribute towards a sustainable and enduring solution to the power supply shortages in Nigeria and congratulated the members on their appointment.
He observed the severe shortages the country has suffered in electricity supply in the last three decades, noting that with an estimated population of over 200 million people, peak power production in 2022 hovered around 3,000 – 4,500 MW.
The Director General said, “these shortages have had an extremely negative impact on the economy’s ability to grow and the people’s quality of life, hence the obvious need for serious interventions to remedy the situation”.
He noted that successive governments in Nigeria had in the past embarked upon projects and programmes to address the challenges, including the privatisation and sector reform programme, aimed at encouraging private investment and participation in the power sector, to augment the government’s efforts and interventions in an environment of severe fiscal [budgetary] constraints.
According to him, the Nigerian Electricity Regulatory Commission [NERC] has projected an increase in electricity generation capacity to 25,000MW by the year 2025 with an estimated peak demand of 32,000MW.
“When suppressed demand is factored in, demand is expected to grow to over 60,000MW by the year 2030 if Nigeria is to meet its economic growth aspirations. This projected supply deficit presents an opportunity for Private Finance Initiatives (PFI) in the Nigerian Electricity Supply Industry (NESI”, he added.
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