GE, Mainstream sign N8.3 billion fresh Kanji power plant expansion deal

Mainstream Energy Solutions Limited (MESL), the concessionaire in the Kainji and Jebba hydro power plants, yesterday signed a $26 million (about N8.3 billion) rehabilitation agreement with GE Electric (GE) for the upgrade and expansion of the Kainji Turbine Generator unit 1 G 7.

According to the terms of the agreement, the rehabilitation is expected to be completed in 24 months and is expected to add 80 Mega Watts (MW) raising Mainstream’s power generation from both Kainji and Jebba Hydo Power Plants to about 1,000 MW.

The two plants have a combined installed capacity of about 1, 330 MW.Speaking at the brief ceremony yesterday in Abuja, the Chairman of MESL, Col Sani Bello (rtd), said that his company was committed to the concession of Kainji and Jebba plants with a view to significantly improving power supply to the Nigerian society, adding that the negotiations for the rehabilitation of Unit 2 G6 of the Jebba plant was on-going and that shortly, the rehabilitation of that unit would commence to further increase power output by another 96 MW.

But Bello expressed the fear that his company would not be able to fully meet its side of the bargain unless the Federal Government made good its pledge by promptly paying for power generated by the company for which payments are yet to be made.

His words: “We can’t meet our own side of the bargain unless our partners in the concession also meet their own side of the agreement so far, the agreement has been truncated but we have managed to survive and keep our heads above water. I hope that payments are substantially made as agreed. We have got a lot of outstanding invoices.”

Bello noted that the N701 billion-payment guarantee of the Federal Government, which was meant for invoices between January this year and December 2018, was very significant.

He said that initiative would provide up to 80 per cent of invoices payment within the period, as it brought about a rise in invoices payment from between 25 per cent and 30 per cent to 80 per cent.

The Managing Director, Lamu Audu, said: “This strategic gesture is in line with Mainstream’s capacity recovery obligations under the concession agreement with the Federal Government of Nigeria.

“And it is also our contribution towards the incremental power supply programme of the government. The rehabilitation work is expected to commence immediately and will be carried out by GE/Austrong of France.

The rehabilitation is expected to last for 24 months at an estimated cost of $26 million (about N8.280 billion using, the N360/$1 exchange rate)According to Audu, “GE is the contractor in the rehabilitation programme. GE is the original equipment manufacturer.’’

The Chief Executive Office of GE Nigeria, Mr. Lazarus Angbazo, who signed on behalf of his company said that his team was prepared to make the deal a reality.He also said that GE was committed to other provisions of the agreement aimed at launching MESL into the renewable energy sub-sector.

Specifically, the agreement provides for GE to implement the Kainji and Jebba power plants recovery plan; improve the generation and evacuation infrastructure for grid connectivity of Kainji to the West African Power Pool; and develop other hydro power potentials in Nigeria and West Africa.