The Federal Government on Tuesday signed a N78bn ($500m) Memorandum of Understanding with the Xian Electric Engineering Company Limited of China for the execution of transmission projects in the power sector.
The N78bn, a loan obtained from the China Exim Bank, will be used for the construction of power transmission infrastructure across the country.
The Minister of Power, Prof. Chinedu Nebo, said the loan was negotiated by the Minister of Finance, Dr. Ngozi Okonjo-Iweala when President Goodluck Jonathan visited China recently.
He said, “The Chinese Exim Bank is going to give us a concessionary loan in this regard and we are going to get the best possible interest. The Minister of Finance, Dr. Ngozi Okonjo-Iweala, had negotiated it and brought it up to the Chinese Exim Bank during the presidential state visit to China.
“So, we are very comfortable with having this concessionary loan and having very little interest to pay for it.”
Nebo said the contribution of Xian Electric was to liaise and collaborate with the stakeholder agencies of the Federal Government for the conduct of necessary studies required for the successful execution of the project, and to execute the projects according to agreed specifications and timelines.
Others are to provide detailed technical design specification and reference manual for future use in the operation and maintenance of transmission networks and to provide adequate training for the Nigerian workforce and support the local content policy.
The contribution of the Federal Ministry of Power, according to the terms of the agreement, is to facilitate the acquisition of relevant data and reports, and assist in the identification and acquisition of suitable parcels of land and secure the right of way for the execution of the projects.
The ministry is also to provide Xian Electric with the technical details of the Transmission Company of Nigeria’s projects list that will be considered for implementation and to facilitate the execution of needed commercial agreements as may be required for the bankability of the projects.
With regard to the role of Manitoba Hydro International, the consultant managing the TCN, Nebo said, “MHI is the management consultant for the TCN. They are the ones that are designing and delineating the project. So, the entire details of what this money will do will be provided for the group by Manitoba.
“Manitoba is well aware of this and the details are essentially ready, and they will be attached to the MoU. So, we expect that very shortly, all these arrangements will take off.”
The minister said the MoU would last for a two-year period, stressing that many of the TCN projects would have been completed before the end of the process.
In his remarks, the General Manager, Xian Electric, Mr. Ji Junhua, said both parties had earlier exchanged ideas on the transmission upgrading project.
“Signing this MoU symbolises that we have furthered our relationship and we will continuously try our best to smoothen the whole process,” he said.
Junhua reiterated the group’s commitment to establishing multiple after sales and training centres in Nigeria.
Information from Punch was used in this report.