Bidders for Zungeru Hydropower plant must have N50bn asset base

The transaction advisory team for the 700MW Zungeru Hydropower project has said that prospective bidders must have a minimum asset base of N50 billion or its equivalent.

The project according to Bureau of public enterprises is a demonstration of government’s commitment to increase the private sector participation in the electric power sector to bridge the power deficit in the country.

Tomiwa Aregbesola, team lead for the transaction adviser (Halcrow Infrastructure), in his presentation during the road show of the project on thursday, noted that the project which is aimed to contribute to the national power supply is expected to boost economic activities in the country while creating to create over 1 million jobs.

Other requirements according to him include; experience in undertaking similar projects including an evidence of managing hydropower plant capacity of at least 500MW, key management staff with relevant experience working on a similar project and at least 15 years in the relevant industry.

He explained that “the construction works on the power plant started in May 2013 , with an estimated completion time of five years. However, due to some constraints, the projects is yet to be fully completed and Commissioned.

“The $1 billion project was designed to have an installed capacity of 700MW driven by the use of renewable resources.”

According to him, hydropower has the utmost renewable energy potential and a fundamental vehicle for development.

He explained that although the seasonal variation in water volume in Nigeria constitutes a high risk factor for electricity supply, hydroelectric energy is considered highly efficient and safe.

“Nigeria is a country with population of more than 200 million making it the most populous in Africa. It has less than 55 percent of its population connected to electricity. This implies that only about half of the people share 4500MW of power going by the global standard of 1,000 MW per one million people, Nigeria has about 200,000MW deficit power.

“Nigeria trails behind in electricity consumption,” he added.

The most recent private sector investment in Nigeria is the concession of the Gurara phase 1, a 30MW hydropower plant in Kaduna state, while negotiation with the preferred bidder is currently ongoing for the concession of the Kashimbila 40MW hydropower plant in Taraba state.

The three operational hydropower plants(Kainji, Jabba and Shiroro) accounts for 23.32 percent of the total energy output in the year 2020.

In his address, the Director general of the Bureau of Public Enterprises, Alex Okoh said that the key objective of the concession of ZHPP to include leveraging private sector’s access to finance and reducing reliance on government budgetary allocation to operate and maintain the facility.

He said, “given the urgency and priority of the FGN for the quick completion of the ZHPP concession, a revised workplan was prepared, envisaging the completion of the transaction by March 2023.

“We hereby solicit the full support and cooperation of all stakeholders, to enable us expeditiously conclude the transaction, as planned.

According to the DG, the next step in the concession process is the preparation and submission of requests for quotations by bidders on or before Thursday, November 24, 2022, which will be followed by the evaluation of the requests and shortlisting of potential bidders who will be issued request for proposals.