Nigeria is clear to start building Africa’s second-largest hydroelectric plant after the government settled an arbitration case that was holding it up.
The Mambilla dam complex, now priced at $4.8bn, is to be built by a consortium led by China Energy Engineering and Sinohydro. It had been the subject of a legal dispute with a previous bidder, Nigeria’s Sunrise Power and Transmission.
Nigeria’s power minister Sale Mamman said the arbitration, heard at the International Chamber of Commerce in Paris, has now been resolved.
"We have now overcome the major problem stopping this project and it is nearly over," he told Bloomberg.
He added that Abubakar Malami, Nigeria’s attorney general, was finalising the terms of the settlement, and work was expected to begin this year.
Sunrise brought the case against the Nigerian government after it awarded the project to two other Chinese companies in 2007, which it said was a breach of its own deal, signed in 2003. It had been seeking damages of $2.3bn.
Leno Adesanya, the chief executive officer of Sunrise, said in November that the company had spent millions of dollars to raise about $6bn for Mambilla, and had suffered "through improper administrative interruptions and interventions".
China’s Export-Import Bank, which is to provide about 85% of the funding, said it would not proceed with its loan until the legal case was resolved.
The project was given a boost in 2018 after President Xi Jinping of China announced his support for the project in a meeting with President Buhari of Nigeria (pictured).
The Mambilla Hydropower complex, which has been under discussion for more than 40 years, will connect to four dams on the Donga River near Nigeria’s border with Cameroon.
Water from the dams will be diverted through three tunnels with a total length of 33km to a massive underground powerhouse, after which the water will rejoin the Donga.
The first feasibility study was carried out by Moto Columbus in 1972, but attempts to construct a power station were unsuccessful.
When complete, Mambilla will be second in Africa only to Ethiopia’s Grand Renaissance Dam. It is expected to supply about a quarter of the country’s electricity. Â
Image: China hosted President Buhari’s delegation in the Great Hall of the People (Buhari/Twitter)Â