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$5.8b Mambila Power Project Scales Financial Hurdle

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water projects - Investors King

The Senate Committee on Local Content has said the $5.792 billion Mambila Hydro-Electric Power Project is set for take-off following the successful resolution of financial and legal hurdles that delayed the project.

Its Chairman, Senator Teslim Folarin, gave this indication yesterday in Abuja while receiving the report of the finance sub-committee of the project.

He said the contractors handling the project are expected to commence work at the site before the end of 2021.

According to Folarin, the subcommittee was an off-shoot of the Technical Working Group on Mambila Hydro-Electric Power Local Content inaugurated in June, last yaer.

“The Federal Executive Council on 30th August, 2017, approved the contract on the Mambila Hydro Electric Power Project in the sum of $5.792billion for the construction of 3050MW.

“The project was awarded to Chinese contractors JV (CGGC-SHC-CGCC), with the site in Gembu, Taraba State,” Folarin said.

He noted that the challenges that arose in the course of the execution of the project, made the Presidential Committee on Northeast Development now the Northeast Development Commission (NEDC) to review the initial plan of the Technical Working Group.

He said the NEDC came up with a working document, wherein the work of the TWG was reshaped and streamlined for effective and seamless implementation of the project.

Folarin added: “Thereafter, the reviewed report was forwarded to the National Assembly for further legislative action.”

“Consequently, the National Assembly along with the Technical Working Group, constituted the Finance Sub-Committee under the Chairmanship of the Executive Director, NEXIM (Nigerian Export and Import) Bank.

“The Sub-Committee was inaugurated earlier this year by the Senate Committee on Local Content and it was mandated to report back to the Committee within six weeks.”

The Senator said the subcommittee was mandated to work out modalities that would facilitate the financial requirement of the local content aspect of the project, which was estimated at N1.7billion representing 30 per cent of the approved contract of $5.7billion.

He said, “The Nigerian Export and Import Bank was mandated to play the lead role in the sub-committee, while the Nigeria Sovereign Investment Authority was to serve as the secretariat of the panel.

“I have no doubt in my mind that all these issues, among others, are succinctly addressed in the report and I believe that at the end, we shall have a document that will provide a way forward on the project.”

Folarin told reporters after the session that the major legal encumbrance which had made it almost impossible for the legacy project to take off, had been resolved.

He said, “We have made some progress and breakthroughs, but we are yet to forward the report to the leadership of the Senate.

“The Federal Government was mandated to pay to the contractors – Sunrise – the sum of $200million and if we don’t pay within a stipulated time, then we have accrued interest.

“As far as the contractors are concerned, they said their money is now $400million because of the accumulated interests.

“The project was officially awarded by the Federal Executive Council on August 30, 2017, and it has been signed as a contract between the Nigerian Government, Ministry of Power and the Chinese Joint Venture of CGGC.”

On her part, the liaison officer and administrator for Hypertech, the consultant to Federal Government and Chinese Government on the Mambila project, Mrs Maimuna Muhammed, said all litigations have been effectively resolved.

Mrs Muhammed said, “We have a breakthrough concerning all the litigations about the project. All the delays we had before everything has been sorted out.

“Now we are ready to kick start the project. The next programmes we are going to have is the Business Roundtable, after that we will move to site, in Taraba State.”

The Consultant to the Senate President on Mambilla HEPP Local Content, Muhammad Mustapha, said membership of the committee also consists of the technical committee which was chaired by ministry of power and co-chaired by ministry of water resources.

He said the human capital development committee that was chaired by the Petroleum Technology Development Fund co-chaired by the energy council, was also involved.”

Muhammad added that part of the challenges that had caused significant delay over time had been the legal encumbrance.

He said, “We will like to mention that in qualifying the efforts of this committee as local content, we have been able to identify the legal aspect of the project to be a local content concern.

“The pre-commencement activity has already been approved two years before now.

“Part of the effort of the finance sub-committee is to articulate the local content aspect of the project as a whole and the pre- commencement activity in specifics.

“This activity stands at four major areas: the security of the site, access road to open up the site, the resettlement plan of over 140,000 people and air field for logistic base.

“We call on the implementation committee to work assiduously to meet the six week timeline as the project is building a new political momentum toward implementation.”

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

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Economy

U.S Senate Passes $749 Billion Inflation Reduction Act

The United States Senate has voted in support of President Joe Biden’s $749 billion Inflation Reduction Act expected to rein in America’s over 40-year high inflation rate, support American families by reducing everyday energy costs and compel the richest corporations in America to pay their taxes.

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The United States Senate has voted in support of President Joe Biden’s $749 billion Inflation Reduction Act expected to rein in America’s over 40-year high inflation rate, support American families by reducing everyday energy costs and compel the richest corporations in America to pay their taxes.

Explaining the significance of the bill, the President said it will reduce the federal deficit by over $300 billion and cap seniors’ out-of-pocket spending on prescription drugs at $2000 a year, no matter what their drug bills would otherwise be, seniors citizens will not pay more than $2000.

Also, 13 million Americans presently under the Affordable Care Act, will save $800 on their health insurance premium a year.

“This bill tackles inflation by lowering the deficit and lowering costs for regular families,” President Biden declared.

Americans earning below $400,000 a year will not pay any new taxes while the wealthiest corporations will now be paying 15% on income, estimated at $40 billion in 2020. The bill will ensure America invests $369 billion in clean energy and addresses the climate crisis.

“It also gives consumers a tax credit to buy any electric vehicle or fuel cell vehicle, new or used, and a tax credit for up to $7,500 if those vehicles were made in America.

“This investment in environmental justice is real. It also provides tax credits that will create thousands of good-paying jobs — manufacturing jobs on clean energy construction projects, solar projects, wind projects, clean hydrogen projects, carbon capture projects, and more — by giving tax credits for those who build these projects here in America,” President Biden stated.

Speaking on the milestone, President Joe Biden said “I ran for President promising to make government work for working families again, and that is what this bill does — period.”

President Biden would be expected to sign the Act into law once the House of Representatives passed it.

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Economy

NRC Suspends Train Service on Lagos-Kano, Ajaokuta Routes

The Nigerian Railway Corporation (NRC) has suspended train services on the Lagos- Kano and Ajaokuta routes.

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Lagos-Ibadan Train Services - Investors King

Following the recent terrorist attacks in various parts of the country, the Nigerian Railway Corporation (NRC) has suspended train services on the Lagos- Kano and Ajaokuta routes.

Also, train services were reported to have been suspended at Ajaokuta station along the Warri-Itakpe route by the NRC after the attack on some passengers by gunmen on Monday.

According to a statement from the Ministry of Transportation and the NRC, the train services would be suspended until the security of those routes is assured.

The Managing Director for NRC, Fidet Okhiria, who confirmed the news about the suspension, noted that the corporation did not stop train services on the Warri-Itakpe route.

Okhiria said: “We have not stopped (services), rather what we said was that we are not going to be stopping at the Ajaokuta station.

“This is because on Monday, while passengers were leaving the station with their private cars and buses, they had people shooting at them. So we said we will not stop there again for passengers.

“The train is still running, but for now we will not be stopping at Ajaokuta because they have some concerns there.”

Investors King recalls that the NRC had, on 29th of March, suspended train service operations on the Abuja -Kaduna axis as a result of a terrorist attack that left about 8 dead, injured many and led to the kidnap of about 200 persons.

Meanwhile, the Federal Government has hinted that as soon as all security measures are put in place, train services for the Abuja -Kaduna axis would resume.

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Economy

Hard Times For Nigerians As Price Of Kerosene Rises to N800 Per Litre

Nigerians are again faced with a new dilemma, as the price of kerosene skyrocketed to N800 per litre over the weekend.

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Kerosene

Just a few weeks after adjusting to the new prices of petrol, diesel and gas, Nigerians are again faced with a new dilemma, as the price of kerosene skyrocketed to N800 per litre over the weekend.

Investors King recalls that as of last week, kerosene, which is used majorly in the average Nigerian household, was sold at the rate of N700 per litre.

However, a new market survey carried out by Investors King revealed that as of August 2, kerosene was sold between N800 and N850 per litre in some urban parts of Lagos, and in some suburb filling stations, the commodity was sold as high as N1000 a litre.

Speaking on the increment,  the National Operations Controller, Independent Petroleum Marketers Associations of Nigeria, IPMAN, Mike Osatuyi attributed the hike in the price of kerosene to the exchange rate.

While noting that Kerosene is a deregulated market, Osatuyi added that the petroleum product is subservient to change as a result of shifts in the market.

He said: “It’s a deregulated market. It is also a function of the dollar to naira rate and the crude price at the international market. Since cooking kerosene is deregulated, prices can go up, it can also come down”.

 Similarly, the Executive Secretary, Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN), Olufemi Adewole, in an interview, disclosed that the ever-increasing exchange rate is one of the reasons for the rise in the price of kerosene.

Cooking kerosene is deregulated so prices depend on foreign exchange. A dollar is now 700 Naira from 600 Naira just last month, so prices will surely increase”, he said.

Meanwhile, an energy expert, Bala Zakka, attributes the reason behind this continuous sharp price increase to Nigeria’s inability to produce and refine its own petroleum products for local consumption, despite the abundance of crude oil within its borders.

Taking to social media, many Nigerians have continued to complain about the hike in price, as well as the country’s harsh economic situation.

Critics find it more appalling that Ghana which has no oil within its borders, sells kerosene to its citizens at the price of 12.044 GHS, an equivalent of 585 Naira per litre.

 To this end, many Nigerians have taken to their social media pages to complain about these hard times.

Investors King gathered that apart from the increment in the price of kerosene, the price of fuel also increased, as a litre is now being sold for N179.

However, if this trend continues, there are indications that feeding might be a challenge for the less privileged.

Recall that in July, the National Bureau of Statics (NBS), in a report, disclosed that the average price of Kerosene rose from 679.54 in May 2022, from 589.82 which it was in April, equating to a 15.21 percent increase.

The report further stated that the average retail price per litre of Household Kerosene paid by consumers in June 2022, increased by 12.09%, while the state profile analysis of average price in May 2022 varied with Enugu ranking first, as the state with the highest paying price of 868.75 per litre for kerosene, while other states juggled between N558 and N700 per litre.

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