- NSIA looks for money in its funds pile
Nigeria’s sovereign wealth managers, Nigerian Sovereign Investment Authority (NSIA), has begun putting together its funds management thinking cap to raise $200 million to settle the Chinese firm that won an arbitration against Nigeria over an initial $5 billion Mambilla power project. The hunt for the money followed a directive by President Muhammadu Buhari that it source the money within its pool of investment funds .
The settlement became necessary after the International Court of Arbitration in Paris awarded in favour of Sunrise Power and Transmission Company Limited, a Chinese firm initially awarded the Mambilla Hydropower Project in Taraba State, which was later given to another Chinese firm in breach of an existing contract.
Aaron Artimas, special assistant to the minister of power on media said the government had agreed to pay the sum and had mandated NSIA to work out measures for settling the debt. The settlement would see Sunrise relinquish all claims to the project once every entitlement as stipulated in the agreement with Nigeria’s federal government has been settled.
The $200 million arbitration award is to compensate Sunrise Power for the unlawful termination of the contract for the 1,525 megawatts Mambilla hydropower project.
Ministry of Power officials have assured that the new contractors for the project are now available and are waiting for the current survey of the sites to be completed, as well as for the compensation of landowners to be brought to a conclusion in Taraba State, where the power plant valued at about $4 billion would be erected.
The Mambilla power project had been conceived to generate about 3,050 megawatts of electricity but was reviewed downward to 1,525 megawatts with the project cost cut down to $4 billion by $1 billion.
Artimas said NSIA has been placed to take up the task of sourcing from the compensation fund while the federal government, through the investment authority and other channels, are working on ways to settle the debts while debunking the alleged information that there was no plan to honour such project agreement with the company.
“The only issue now is the delay in payment, but the government has committed to the agreement. However, the government is explaining that the challenge of COVID-19 affected its finances. But despite that, the NSIA was given a mandate on this by the President, because the government has to find the money somewhere, as this was not budgeted for. So the government will pay,” Artimas said.
He emphasised that the International Court of Arbitration in Paris that heard the arbitration did not say parties should come back for any fresh or new issue because Nigeria has accepted and signed documents following that agreement, adding that, “there is a signed agreement between the government and the firm. The document was signed by the Minister of Power and confirmed by the President. It is a standing agreement that Nigeria will pay the $200 million”.
Speaking on the funding, Artimas said, “The project has been reviewed from 3,050MW to 1,525MW in order for it to be more bankable. Once this is fully determined, the China Exim Bank that is to finance the project will come with the funding.
“The bank is funding 85 percent of the project while the federal government is handling 15 percent. If it was not because of the challenge of COVID-19, the President was committed to asking the NSIA (Nigeria Sovereign Investment Authority) to release funds so that contractors can be mobilised to the site,” Artimas further disclosed.
Meanwhile, Titilayo Olubiyi, head of communications, NSIA, in a statement on the matter, said the Mambilla power project was captured under the Presidential Infrastructure Development Fund (PIDF), adding that the Federal Government was still interested in getting the Mambilla project running, but insisted that all obligatory matters had to be cleared for smooth delivery.