Active Mixed AidData Chinese Aid

China Eximbank provides $984.23 million preferential buyer’s credit for 700MW Zungeru Hydroelectric Power Plant Construction Project

$984.3K USD

Funder	Export-Import Bank of China (China Eximbank)
Recipient Organization	Government of Nigeria
Country	Nigeria
Start Date	Sep 28, 2013
End Date	Apr 23, 2027
Duration	4,955 days
Number of Grantees	1
Roles	Recipient
Data Source	AidData Chinese Aid
Grant ID	`30371`

Grant Description

China Eximbank provides $984.23 million preferential buyer’s credit for 700MW Zungeru Hydroelectric Power Plant Construction Project On September 28, 2013, China Eximbank and the Government of Nigeria signed a $984.23 million preferential buyer’s credit (PBC) agreement for the 700MW Zungeru Hydroelectric Power Plant Construction Project.

📋 Loan / Grant Terms

📅 Maturity20 years

⏳ Grace Period7 years

💹 Interest Rate2.5%

The loan’s final maturity date is September 21, 2033.

As of December 31, 2020, Nigeria’s Debt Management Office (DMO) reported that the China Eximbank loan had achieved a 57.14% disbursement rate ($562.47 million) and the borrower had made interest repayments worth $26.36 million and no principal repayments to the lender. As such, the loan’s (principal) amount outstanding, as of December 31, 2020, was $562.47 million.

The borrower is expected to use the proceeds of the loan to finance approximately 75% of a $1.293 billion commercial contract between the Government of Nigeria and a consortium consisting of Sinohydro and China National Electric Engineering Co (CNEEC), which was signed on October 19, 2012. The Government of Nigeria agreed to directly finance the remaining 25% of the commercial contract cost.

The purpose of the project is to construct a 700WM hydroelectric power plant — with four, 175MW power generators — on the Kaduna River in Niger State (exact locational coordinates: 9.90091, 6.28723).

The project also involves the construction of a dam, electricity transmission lines, and associated substations to evacuate power from the dam. Upon completion, the power plant is expected to generate 2.64 billion kWh of electricity a year.

The project is also expected to support flood control, irrigation, as well as water supply and fish breeding facilities.

According to a ‘valuation report’ that was undertaken prior to implementation, the project would likely negatively impact 22,100 persons, 15,958 farmlands and 6,762 properties domiciled in 98 communities. Sinohydro and CNEEC are the contractors responsible for project implementation. On May 28, 2013, a groundbreaking ceremony was held.

Then, on January 22, 2018, the placement of the first silo of Roller Compacted Concrete (RCC) took place.

As of June 18, 2020, the Government of Nigeria’s Debt Management Office (DMO) reported that China Eximbank had disbursed 52.65% of the original face value of the PBC. By October 28, 2019, the project had achieved a 68% completion rate. The rotor of the first power generation unit was hoisted into place on September 30, 2021.

Then, on March 28, 2022, the first (175MW) power generation unit went into operation. The unit was officially commissioned on April 1, 2022. However, the broader project has encountered major implementation obstacles and delays.

In 2015, the project stalled due to insufficient compensation of communities affected by the power plant (requiring resettlement) and litigation by aggrieved persons. Nigeria’s then Minister of State for Power, Mohammed Wakil, confirmed the stoppage of the project in an interview. He said: ‘immediately [after] the Zungeru project took off, we had legal challenges.

Somehow in the communities, some people, I can say powerful people instituted court action and in fact they succeeded in getting an injunction restraining government from further doing the project. […] At a point we had about two to three litigations on the project but the ministry has been trying to resolve the problems outside the court.

A committee has been set up and they have held several meetings with the parties involved.

It is a national project and we do not want to be unnecessarily bogged down by litigations. […] We are being careful and are engaging the parties with a view to settling out of court.

That has tampered with our timetable but even with that there has been a lot of progress.’ Nigeria’s Director of Power, Sanusi Garba, said at the time that ‘you cannot pay 98 communities overnight.

We have checks and counter checks at every point in time, and it is a slow and laborious process because you don’t want to pay someone twice and you don’t want to omit anybody.’ Then, in January 2022, three Chinese workers were abducted from the project site after a shoot-out that killed workers and police.

In March 2022, Nigeria’s Minister of Power, Abubakar D.

Aliyu, said ‘[i]t’s unfortunate that the insecurity in some parts of the country has affected the delivery of the Zungeru Hydro Plant project because some persons were abducted by bandits and have not been released’.

The 700MW Zungeru Hydroelectric Power Plant Construction Project was originally scheduled for completion by the end of 2017. However, its scheduled completion date was later pushed back to December 2021 and then December 2022. It was completed in 2023, with operation starting in November 2023.

📋 Staff Comments

This project is also known as the Zungeru 4x175MW Hydropower Plant. The Chinese project title is 宗盖鲁水电站 or 尼日利亚宗格鲁水电站项目.
Boston University’s China's Global Energy Finance Database identifies the face value of this loan as $975 million and SAIS-CARI report the maturity length of this loan as 19-years. AidData records the face value ($984,320,000) and maturity length (20-years) that is reported by Nigeria’s Debt Management Office (DMO) in its ‘Loans Obtained from China Exim As At December 31, 2020’ publication.

📚 Sources & References

Nigeria
Chinese firm sign deal to start 700 MW power project in Niger State
China to Invest N146 Billion in Nigeria's Power Sector
Nigeria: FG Approves U.S.$1.7 Billion Counterpart Fund for Power Sector
Nigeria: Zungeru 700 Megawatts Plant and Nigeria's Power Conundrum
Chinese companies to build hydro-power plants for Nigeria
We shall revolutionize the nation’s power sector – Jonathan
China to invest $927m in Nigeria’s power sector
FG Signs MoU With Chinese Firms …Terminates Manitoba’s Hydro Power Contract
Business Monitor remain cautious over Nigeria’s ambitious capacity expansion plans
Exim Bank of China in record Nigerian loan
Interactive map – Chinese dams in Africa
Power
中国对非洲“两优贷款”十大项目
中国电建尼日利亚宗格鲁水电站签订优惠贷款协议
Update of the ECOWAS revised master plan for the development of power generation and transmission of electrical energy Vol 5
North Core/Dorsale Nord Regional Power Interconnector Project
中尼经贸：挑战中孕育大机遇
Status of Loans Obtained from China Exim As At March 31_2020
Great walls over African rivers: Chinese engagement in African hydropower projects
Out of China: The activities of China's export credit agencies and development banks in Africa
Zungeru 4X175MW Hydropower Plant in Nigeria
尼日利亚总统出席中企承建的尼水电站开工典礼
China's Global Energy Finance, http://nigeria.mofcom.gov.cn/sys/print.shtml?/e/s/201305/20130500144933
中国电建承建尼日利亚宗格鲁水电站主体工程开工
GeoHack - Zungeru Hydro Power Dam
Correspondence: In that remote place-visiting the camp of the Zongailu Hydropower Project in Nigeria
尼日利亚宗盖鲁水电站举行开工典礼
Zungeru Hydro Power Dam
尼政府大力推动电站建设并批准拨付3亿美元用于电站建设
Preferential loan supports hydropower project in Nigeria
Zungeru Hydropower Project
Zungeru hydropower project 68% complete – Ministry
BU_PITCH_ENGLISH_2018
Nigeria's Actual External Debt Service Payments in Fourth Quarter, 2018 in Thousands of USD
February 2017 Base Prospectus
November 2018 Bond Prospectus
进出口银行的非洲足迹—尼日利亚篇
Zungeru Hydroelectric Power Project in Nigeria latest update, $1.3bn Zungeru Power Project to be commissioned this year, 2022
China-built hydropower station begins electricity generation in Nigeria
中国电建尼日利亚宗格鲁项目水电站碾压混凝土全线浇筑封顶
尼日利亚宗格鲁水电站首台机组转子吊装
中国新闻网：中企承建尼日利亚最大水电站：年内还将实现3台机组发电目标
Abandoned Power Projects: Litigations Stall Zungeru Power Project
PPI: Insecurity delays delivery of Zungeru Hydro Plant – Minister
Nigeria - Projects - Electricity - Hydro
Nigeria Remains China's 3rd Largest Trading Partner in Africa - Envoy
POWERCHINA: Nigeria Zungeru Hydropower wins award for security development
Transportation Ministry Presents 2021 Budget To National Assembly
中国进出口银行融资支持的尼日利亚宗格鲁水电站并网发电成功
央企承建的尼日利亚最大水电站首台机组正式发电
Nigeria to get Zungeru Hydroelectric Power Project
Insecurity threatens progress of FG’s 700MW Zungeru power plant
Nigeria invites Zungeru hydro concession bids
Nigeria starts commissioning the 700 MW Zungeru hydropower plant
Senate Probes Concessioning Of 700MW Zungeru Power Plant
BPE: FG
China EXIM Bank Collaborating to Build Zungeru Hydroelectric Power Plant
Nigeria plans to concession the 700 MW Zungeru hydro project by March 2023
China-built hydropower station begins electricity generation in Nigeria
Nigeria offers concession on $1.3 billion China-funded hydro power plant
Loans Obtained From China Exim
December 31, 2020, 2019 Annual Report and Statement of Accounts, 2018 Annual Report and Statement of Accounts, 2017 Annual Report and Statement of Accounts
Loans Obtained From China Exim
September 30, 2021
Loans Obtained From China Exim
March 31, 2020
Actual External Debt Service Payments
January - March, 2024
Actual External Debt Service Payments
January to December, 2023
Actual External Debt Service Payments
January to December, 2022
Actual External Debt Service Payments
January to December, 2021
Actual External Debt Service Payments
January to December, 2020
Actual External Debt Service Payments
January to December, 2019
Actual External Debt Service Payments
January to December, 2018
Actual External Debt Service Payments
January to December, 2017
The Socio-economic Benefits and Consequences of the Proposed Zungeru Hydropower Project on the Livelihood of the Dwelling Natives
Zungeru hydropower plant to begin operation November – Minister Loan applications and disbursements are still being received and processed as the projects continue to evolve. Ongoing monitoring and evaluation are in place to ensure project continuity.