14 December 2017, Sweetcrude, Abuja – The concessionaire of Kainji and Jebba Hydro Electric plants, Mainstream Energy Solutions Limited (MESL), has injected a fresh $26 million (about N9.360 billion) into the Kainji Hydro Power Plant to rehabilitate its Hydro Turbine Generator unit 1G7.
The agreement for the rehabilitation project was signed with General Electric (GE) in Abuja, yesterday.
The rehabilitation, which is expected to be completed in 24 months will add 80 Mega Watts (MW) of electricity to the company’s generation raising its power generation from both Kainji and Jebba Hydro Power Plants to about 1, 000 M W. The two plants have a combined installed capacity of about 1, 330 MW.
Speaking at the signing ceremony, Chairman of MESL, Col. Sani Bello (rtd), said his company was committed to the concession of Kainji and Jebba plants with a view to significantly improving power supply to the Nigerian society.
He said negotiations for the rehabilitation of Unit 2 G6 of the Jebba plant was on-going and that shortly, the rehabilitation of that unit would commence to further increase power output from Mainstream’s operations by another 96MW.
Bello, however, said that his company would not be able to fully meet its side of the bargain unless the federal government made good its pledge by promptly paying for power generated by the company.
“We can’t meet our own side of the bargain unless our partners in the concession also meet their own side of the agreement so far, the agreement has been truncated but we have managed to survive and keep our heads above water. I hope that payments are substantially made as agreed. We have got a lot of outstanding invoices,” he said.
Col. Bello noted that the N701 billion payment guarantee of the federal government which was meant for invoices between January this year and December 2018 was very significant.
He said that initiative would provide up to 80 percent of invoices paid within the period, describing it as “a significant”, as it brought about a rise in invoices payment of from between 25 percent and 30 percent to 80 percent.
The Managing Director, Engr. Lamu Audu, said of the rehabilitation deal between Mainstream and GE, “This strategic gesture is in line with Mainstream’s capacity recovery obligations under the concession agreement with the federal government of Nigeria.
“And it is also our contribution towards the incremental power supply programme of the government. The rehabilitation work is expected to commence immediately and will be carried out by GE/Austrong of France.”
Audu noted that “When 1 G7 was in operation up to September 1, 2014. However, I must mention that when we took over in 2013, the unit was out of operation for the previous 7 years. So when we took over, we took the initiative to see if we could recover it, even if at full capacity. We succeeded but unfortunately, the reliability then was very poor.
“The safety risk of it was on the high side so we decided to shut it down, considering the age and the fact that it had never gone through statutory overhaul since commissioning.”
The rehabilitation is expected to last for 24 months at an estimated cost of $26 million (about N8.280 billion using, the N360/$1 exchange rate)
He added that “Mainstream is poised to completely play its part in accordance with the concession agreement by recovering lost capacities from our power plants and ensure that Nigerians really benefit from the federal government power sector privatization programme and to enable more private sector players to invest in it to move the sector forward.”
According to Engr. Audu, “GE is the contractor in the rehabilitation programme. I must mention that this particular 1 G7 from the beginning the machine designed and constructed by GE. So GE is the original equipment manufacturer.
“But that notwithstanding, going through the procurement process, we did not just pick GE because it was the Equipment Manufacturer because we had to ensure value for money. They went through competitive bidding for the project and won.”
Since the commencement of operations in 2013, MESL has raised total available capacity for both plants to 922MW.
The Chief Executive Office of GE Nigeria, Mr. Lazarus Angbazo, who signed on behalf of his company said that his team was prepared to make the deal a reality.
He also said that GE was committed to other provisions of the agreement aimed at launching MESL into the renewable energy sub-sector.
Specifically, the agreement provides for GE to implement the Kainji and Jebba Power Plants Recovery Plan; improve the generation and evacuation infrastructure for grid connectivity of Kainji to the West African Power Pool, and develop other Hydro Power potentials in Nigeria and West Africa.