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FG Completes Concession Process for N6.68bn Hydropower Plant

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Hydro
  • FG Completes Concession Process for N6.68bn Hydropower Plant

The Federal Government has completed the concession process required for the handing over of the N6.68bn Gurara Hydropower Plant to a concessionaire.

It said the 30-megawatts power plant located in Kaduna, would contribute to addressing the gap in electricity supply across the country, particularly in the North-West states of Nigeria.

The Minister of Water Resources, Suleiman Adamu, who disclosed this while speaking on the sidelines of a media workshop in Abuja, also noted that the Federal Government had decided to concession the hydropower components of selected dams.

He said the Gurara dam was one of the selected dams, adding that the processes needed to concession the 30MW project had been completed.

Adamu said, “We are not concessioning the entire dams in our concession arrangement. Rather, the concession is for the hydropower component of the dams and the dams will still be owned by the Federal Government.

“In Gurara, we have a hydropower plant there. All the processes for the concessioning have been completed and it is now a matter of presenting it to the Federal Executive Council for approval.”

The minister, however, observed that the transmission lines to evacuate power from the hydropower plant were not ready yet.

“That is not within the purview of the Federal Ministry of Water Resources, it is undertaken by the TCN (Transmission Company of Nigeria) but a lot of provision has been made and we hope that by the end of this year something better will happen,” Adamu stated.

He further noted that the 40MW Kashimbilla Hydropower Plant was also ready.

“Again, we are also waiting for transmission lines to be completed but have started the process of concessioning and we have appointed a transaction adviser, hopefully by next year, we should be able concession that one as well,” Adamu said.

On why there was a need for the hydropower project, the Infrastructure Concession Regulatory Commission explained that the plant when operational, would increase the country’s overall power generation.

The ICRC stated that in addition to fulfilling the water supply needs of residents, the dam had been equipped with world-class amenities for hydropower generation, irrigation, farming, tourism development, and fish farming.

It said the water ministry plans to integrate the 30MW power plant into the Gurara dam works, which is expected to produce 115 gigawatts-hour of energy annually, representing a 44 per cent annual capacity factor.

“The water from the Gurara reservoir will be used to produce hydroelectricity using the water that is available once the water supply demands have been satisfied,” the commission stated on its website.

On the rationale for adopting a Public Private Partnership model for the operation of the plant, the ICRC explained that the proposed model for the concessioning of the hydropower component of the dam would require one concessionaire to take custody of the project for a period of time as determined by the financial analysis.

It stated that under this form of PPP, the concessionaire would be responsible for the use of the asset in generating hydropower and connecting to the transmission network made available by the TCN on behalf of the Federal Government to the sub-station for distribution.

“Therefore, an operate-and-maintain model was selected as the best PPP methodology for concession of the project,” it added.

Adamu had earlier revealed that Nigeria had a hydropower potential of 12,220MW but that only about 1,930MW of this had been developed at Kainji, Jebba and Shiroro dams.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Economy

Nigeria’s Plan to Review Oil Companies’ Gas Flaring Strategies

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Oil

Nigeria is ramping up its efforts to address environmental concerns in the oil and gas sector with a comprehensive plan to review gas flaring strategies of international and indigenous oil companies.

The Minister of State for Environment, Dr. Iziaq Salako, announced this initiative during a national stakeholders engagement meeting on methane mitigation and reduction held in Abuja, Investors King reports.

Gas flaring, a common practice in the oil industry, releases methane—a potent greenhouse gas—into the atmosphere, contributing to climate change and posing health risks to communities near oil facilities.

Nigeria aims to end routine gas flaring by 2030, aligning with global climate goals and commitments.

Dr. Salako explained the importance of reducing methane emissions and highlighted the detrimental effects on public health, food security, and economic development.

He outlined practical steps being taken to tackle methane emissions, including the development of methane guidelines and the engagement of government institutions.

The ministry, through the National Oil Spill Detection and Response Agency, will conduct periodic reviews of oil companies’ plans to ensure compliance with the gas flaring deadline.

Deloitte management consultants will assist in conducting comprehensive forensic audits to scrutinize the legitimacy of forward-contracted transactions.

President Bola Tinubu’s commitment to environmental sustainability underscores the government’s dedication to addressing climate change and fulfilling its multilateral environmental agreements.

The engagement event served as a platform for stakeholders to discuss methane mitigation strategies, existing policies, and implementation challenges.

Collaboration and dialogue among diverse sectors are crucial in charting a unified course towards sustainable methane reduction in Nigeria’s oil and gas industry.

As the country navigates its environmental agenda, ensuring accountability and transparency in gas flaring practices remains paramount for achieving a greener and healthier future.

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Economy

Interest Rate Jumps to 24.75% as CBN Takes Aggressive Stance Against Inflation

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Dr. Olayemi Michael Cardoso

The Central Bank of Nigeria (CBN) has announced a significant increase in the monetary policy rate, known as the interest rate, to 24.75%.

This move disclosed by CBN Governor Olayemi Cardoso during the 294th Meeting of the Monetary Policy Committee press briefing in Abuja, represents a bold step by the apex bank to address the mounting inflationary pressures faced by the country.

With inflation soaring to 31.70% in February, the CBN aims to moderate this upward trend by tightening its monetary policy stance.

This decision follows the previous hike in the interest rate to 22.75% in February, showcasing the CBN’s commitment to combatting inflationary forces.

While the bank opted to maintain the Cash Reserve Ratio at 45%, the significant increase in the interest rate underscores the urgency of the situation and the need for decisive action.

Governor Cardoso emphasized that these measures are essential to stabilize the economy and safeguard the purchasing power of the Nigerian currency.

The 294th MPC marks the second meeting under Governor Cardoso’s leadership, indicating a proactive approach to addressing economic challenges.

The next MPC meeting is scheduled for May 20th and 21st, 2024, highlighting the ongoing commitment of the CBN to navigate Nigeria’s economic landscape amidst inflationary pressures.

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Economy

Nigeria Braces for 10th Consecutive Interest Rate Hike by Central Bank

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Central Bank of Nigeria (CBN)

As Nigeria grapples with persistently high inflation, the Central Bank of Nigeria (CBN) is gearing up to implement its tenth consecutive interest rate hike in a bid to curb the soaring prices and attract investment.

Analysts surveyed by Bloomberg are anticipating a substantial 125 basis-point increase in the key rate to 24%, marking one of the most significant adjustments in the current tightening cycle.

The decision, expected to be announced by Governor Olayemi Cardoso on Tuesday at 2 p.m. in Abuja, comes on the heels of inflation accelerating to 31.7% in February, far surpassing the central bank’s target range of 9%.

This surge has been primarily attributed to the sharp depreciation of the naira, prompting authorities to devalue the currency twice since June to narrow the gap with the unofficial market rate and encourage investor confidence.

While these measures have seen the naira strengthen in recent days and bolstered investment inflows, including a fourfold increase in overseas remittances and significant foreign investor portfolio asset purchases, there remains a palpable need for more decisive action.

Giulia Pellegrini, a senior portfolio manager at Allianz Global Investors, emphasized the necessity for the CBN to intensify its tightening efforts to regain foreign investors’ confidence in the local bond market.

While acknowledging the positive strides made by the central bank, Pellegrini stressed the importance of a more assertive approach to prevent the diversion of investor attention to other frontier markets.

As the Nigerian economy navigates through these challenging times, the impending interest rate hike signals the CBN’s determination to address inflation head-on and foster a more stable economic environment.

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