FG Reviews $1.3bn Zungeru Plant Over Low Power Output

The Federal Government has launched a review of the $1.3 billion Zungeru Hydropower Project in Niger State over its low electricity output.

The 700-megawatt plant currently generates about 350 megawatts for the national grid, prompting the Infrastructure Concession Regulatory Commission(ICRC) to step up regulatory oversight.

The commission held a stakeholders’ meeting in Abuja with the Federal Ministry of Power, Federal Ministry of Water Resources and Sanitation, Bureau of Public Enterprises and Penstock Limited, the project’s private concessionaire.

The review seeks to identify the legal and operational challenges limiting the plant’s performance. It also aims to establish measures that can raise its contribution to the national grid.

ICRC Director-General Jobson Oseodion Ewalefoh said the government could not allow strategic power assets to operate below their potential.

“President Bola Ahmed Tinubu’s promise to Nigerians that he will solve the power problem is not words for the sake of it,” Ewalefoh said.

He explained that the meeting focused on the factors restricting Zungeru’s output and ways to address them.

“With the administration earnestly working to resolve the country’s power challenges, PPP assets such as Zungeru could not be allowed to operate below capacity,” he added.

The Zungeru project sits on the Kaduna River in Niger State and ranks among Nigeria’s major hydropower investments. It has four generating units and a total installed capacity of 700 megawatts.

The government developed the project at an estimated cost of $1.3 billion to expand electricity generation and strengthen grid stability. Its current output, however, represents only half of its installed capacity.

Under the Public-Private Partnership(PPP) arrangement, the Federal Government remains the grantor while Penstock Limited operates the facility under the concession agreement.

ICRC stressed that its intervention does not seek to alter or take over the concession. Instead, the commission wants both parties to meet their contractual obligations.

Ewalefoh said the commission’s mandate covers the regulation of PPP arrangements and monitoring of concession agreements.

“Signing a concession agreement is only the first step; implementation of the terms in the PPP agreement is what delivers results,” he said.

He added that PPP arrangements require both parties to fulfil their responsibilities because the ultimate goal remains efficient service delivery and value for money.

Section 20 of the ICRC Act 2005 empowers the commission to keep concession agreements, monitor compliance and ensure their effective implementation.

The review will also extend to other power projects operating under PPP arrangements. Ewalefoh listed Kainji, Jebba, Shiroro, Dadinkowa and Kashimbila among the plants that will undergo similar assessments.

The commission plans to compile the findings from the reviews into a report for submission to President Tinubu.

The move comes as the Federal Government intensifies efforts to increase electricity supply by improving existing generation assets. The strategy seeks to unlock more power from infrastructure already in place.

In his 2026 Democracy Day address, Tinubu described electricity as “a democratic dividend we owe every Nigerian.”

The ICRC said the declaration reinforces the need for government assets and PPP investments to deliver the services they were designed to provide.

Ewalefoh said the commission would continue working with the Ministry of Power and other stakeholders to improve the performance of PPP power projects.

“Efficiency is a key reason government assets are handed over to the private sector, and the Commission must ensure that efficiency is achieved through regulatory monitoring and compliance,” he said.

At the Abuja meeting, stakeholders identified the legal and operational issues affecting Zungeru and agreed to reconvene for further discussions.

The ICRC said the process would lead to measures designed to improve the plant’s output and ensure that the multibillion-dollar investment delivers greater value to Nigerians.