FG Completes $70m Yearly Concessionaire of Zungeru Plant to Penstock

February 21, 2024
Zungeru Plant

By Adedapo Adesanya

The federal government has completed the transfer of the operations of the Zungeru Hydroelectric Power Plant (ZHPP) to a concessionaire, Penstock Limited, in a move that will see the country earn $70 million yearly from the deal.

The Vice President, Mr Kashim Shettima, confirmed this during the first meeting of the National Council on Privatisation (NCP) for the year 2024 at the Presidential Villa, Abuja on Tuesday.

A concession is a kind of partnership between the public sector and often private companies that have shown its added value in a specific area, for example developing infrastructure. The handing of the plant to Penstock will see it handle the operations instead of the government.

The concessionaire would pay FG $70 million per year over the next three decades for managing the complex. This brings the estimated revenue to $2.1 billion for the next 30 years.

The VP said the move was expected to boost Nigeria’s power generation capacity and contribute significantly to meeting the country’s growing energy demands.

The NCP also announced significant progress in the ZHPP concession, including the official transfer of the plant’s operations to Penstock Limited.

According to the council, the Concession Agreement was signed on December 13, 2023, by the Bureau of Public Enterprises (BPE) and Penstock Limited.

Following Council approval, the concessionaire fulfilled its obligation by paying 50 per cent of the commencement fees on January 5, while the official handover was done on January 23.

Penstock Energy Limited financed the 700MW Zungeru hydropower plant- the second largest hydropower plant in Nigeria with a staggering $1.3bn loan from China.

Penstock Energy Limited is a subsidiary of Mainstream Energy Solution Limited, the concessionaire of Kainji and Jebba Hydro Power Plants (HPP) with an installed capacity of 760MW and 578.4MW.

Adedapo Adesanya

Adedapo Adesanya is a journalist, polymath, and connoisseur of everything art. When he is not writing, he has his nose buried in one of the many books or articles he has bookmarked or simply listening to good music with a bottle of beer or wine. He supports the greatest club in the world, Manchester United F.C.

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