Nigerian $5.8 billion hydropower deal

Nigerian $5.8 billion hydropower deal

According to CNN, a group of Chinese state owned construction  companies have been awarded a contract by the Nigerian government to build the largest power plant in the country. It is a 3,050 megawatt hydroelectric power plant with 4 large dams (50-150m tall) in Taraba state, Northern Nigeria. It will be completed in the next 6 years.

The project is a big step to solving the power issues in Nigeria. The constant power cuts in the country have affected many industries. The minister of Power, Housing and Works, Babatunde Fashola said the project will have “a positive impact on electricity supply nationwide, productivity, employment, tourism, technology transfer, rural development, irrigation, agriculture and food production”.

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Hydropower is one of the cleanest and most efficient forms of power. This project is very beneficial right now because Nigeria is trying to reduce it’s dependency on crude oil by exploring it’s other natural resources. Hydroelectricity will be effective in powering rural areas.

In 2007, the Nigerian government awarded a $1.4 billion hydropower contract to two Chinese companies but the contracts were dissolved. According to the Nigerian government, the new project will be completed. 85% of the project will be financed by the Chinese export-import bank and 15% by the Nigerian government.

The Chinese are heavily involved in the construction and financing of several projects in Africa. I guess the main question here is how are these African countries going to pay back the loans? Some might say the Chinese companies are contributing a lot to the infrastructure in Africa. This is true, however they are definitely getting something more in return. I believe African countries will fully emerge as global powers when they start to fund and construct their own projects. Foreign companies and countries have more to gain from these projects than the African countries.

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