Nigeria’s Zungeru Hydro among world’s most expensive

Prof Chinelo Nebo09 September 2013, Abuja – The Federal Government is spending N303 million on generation of each megawatt of electricity through the Zungeru hydro project, which is relatively more expensive than what obtains in Africa’s and world’s biggest hydro-power projects, according to a Daily Trust investigation.

The Zungeru project in Niger State, meant to generate 700 megawatts, will gulp $1.3 billion (N 212 billion), making the cost per mega watt to be about $1.857 million.

An analysis of the cost and capacity of hydro projects in other parts of the world showed that the Zungeru project is among the most expensive. It beats Africa’s biggest hydro-power plant which is located in Ethiopia as well as the world’s biggest, located in China.
The Grand Ethiopian Renaissance Dam will generate 6,000mw – that is nine times bigger than Zungeru – at the cost of $4.8 billion. This mean it would cost about N131 million ($800,000) per megawatt, less than half what it would cost the Federal Government through Zungeru.

The Three Gorges Dam in China, which is the world’s biggest hydro project with 22,550 mega watts, was completed in 2012 at the cost of N3.7 trillion ($22.5 billion). The per-megawatt cost is N163 million (about $997,782), slightly above half of what Nigeria is spending on the power to be generated by the Zungeru dam.

For its part, the second biggest hydro dam in the world, the Itaipu Dam, was built at N3.2 trillion ($19.6 billion) to generate 14,000mw, meaning a megawatt costs about N229 million ($1.4m). The dam is jointly owned by Brazil and Paraguay, and is situated along the borders of the two South American countries.

President Goodluck Jonathan flagged off the Zungeru project in May, with a completion date of 2018. The project was first initiated in 1982.

During the ground-breaking ceremony, Minister of State for Power Hajiya Zainab Kuchi said the cost of the project was “attractive”.

“The total cost of construction is USD 1.293 billion giving an attractive energy cost of less than 5 cent/kwh,” she had said.

When contacted for comments on this story, spokesperson for the Ministry of Power, Ms Kande Daniel, said Zungeru project was not expensive when compared to similar projects elsewhere.

In an emailed response to questions by Daily Trust, she said: “Information I gathered indicate that the construction cost of dams across the world is determined by more than one singular factor, say size, for instance. Topography and other factors come to play.

“We can safely conclude that no two dams are the same, and that cost of construction is not determined solely by size.

“Our engineers say also that the figures you see for Zungeru include the cost of transmission components as well as cost of evacuation of power.”

She said costs of other large hydro projects around the world range from $1 million to $7.6 million per kilowatt (sic), and therefore Zungeru “is comparatively on the low side.”

Slow pace
The Zungeru project is being executed by Chinese firm, CNEEC-Sinohydro Consortium, and financed on 25:75 debt equity ratio between Nigeria and the Exim Bank of China.

Though the cost of Zungeru is relatively higher, the Ethiopian project is moving faster. Both dams have the same completion date of 2018, and by April 2013, the Ethiopian project had reached 20 per cent completion just two years after flag off.

But four months after Jonathan performed the ground breaking ceremony of the Zungeru plant, only preparatory work has started at the project site, Daily Trust investigations revealed.

When a Daily Trust reporter visited the project site some weeks ago, few Chinese engineers were seen, carrying out some skeletal construction work.

CNEEC-Sinohydro’s deputy project manager, Mr. Xiaonie, said proper construction works were yet to start because another Chinese company, Hydrochina Kunming Engineering Corporation, was being awaited to deliver the engineering design of the project.

“We are waiting for the design from China. I do not know what is making the delay in the delivery of the engineering design. If we do not have the design, we can’t start any meaningful work,” he said.

He said it would take another three months before construction work would begin at the site, when the design would have been delivered and equipment being shipped from China would have arrived.

He said they were now putting up temporary structures that would serve as offices and housing accommodation for the staff of his company, as well as clearing the site for the construction of permanent housing and office accommodation.

During the ground-breaking ceremony in May, Kuchi had also said the project would water about 5,000 hectares of land among 88 communities in three local governments of Shiroro, Rafi and Wushishi.

Zungeru is second biggest hydro power station after Kainji to be built in Niger state, swelling the number of stations in the state to four-the others being Jebba and Shiroro.
The dam transmission lines would link Jebba-Shiroro line and the line at Tegina to feed the national grid, she had said.

Speaking to Daily Trust, Habu Usman, a farmer in the area, said they were beginning to lose confidence because of what he called delay in executing the project.

“My prayer is that the government is not playing politics with the project, considering the snail speed at which the project takes off and for the fact that next general election is around the corner,” he said.

Chairman of Zungeru Development Association, Malam Salmanu Yusuf, said earlier hitches over compensation have been resolved.

“At the beginning, the project suffered some hiccups, but now all has been resolved. Initially issue of compensation hindered the progress of work at the project site, but now the first half of beneficiaries has been paid and the second batch will soon be paid,” Yusuf said.

– Daily Trust

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