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NNPC and US Agency Sign $1.16 Million Deal for New Power Plant in Abuja

Nigeria’s state-owned energy company, the Nigerian National Petroleum Corporation (NNPC), has signed a deal with the United States Trade and Development Agency (USTDA) to build a new 1,350 megawatts (MW) power plant in Abuja. The agreement should see the USTDA come up with a $1.16 million grant to finance the project.

The deal was signed on Tuesday at the Nigeria International Petroleum Summit (NIPS), which took place in Abuja.  

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The plant will be constructed by General Electric and the China Machinery Engineering Corporation (CMEC), with support from Continuum Associates, a US-based energy consultancy firm.

Details of the project made publicly available suggest that it will be powered with gas from the Ajaokuta-Kaduna-Kano gas pipeline, which the Federal Government says will be constructed soon.

Group Managing Director of the NNPC, Mele Kyari, was at the event and signed the deal on the corporation’s behalf. According to him, the deal would cut Nigeria’s power supply deficit by a significant amount.

Kyari noted that Nigeria was in need of more power to drive economic growth. He linked the country’s challenging business climate to its inconsistent power supply and said that it was a major cause of insecurity in Nigeria.

He also said that the NNPC was “grateful for the grant.”

On her part, the United States’ ambassador to Nigeria, Mary Leonard, explained that the grant would help provide the expertise required to successfully complete the plant. She pointed out that it would be relying on local gas, which she said has been underutilized in the country.  

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The new power plant will be located on about 54 hectares of land in the Gwagwalada Area Council of the FCT. The NNPC says it has already commenced an Environmental Impact Assessment (EIA) of the site.

Nigeria has struggled to meet its power needs. It rarely generates more than 4,000MW of electricity—less than its over 200 million inhabitants demand. Although it has spent over $20 billion on its power sector, more than half its population still lacks access to electricity.

The country’s government is banking on a number of new power stations to boost electricity supply over the next few years.

Featured image source: Daily Post NG

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Ikenna Nwachukwu

Ikenna Nwachukwu holds a bachelor's degree in Economics from the University of Nigeria, Nsukka. He loves to look at the world through multiple lenses- economic, political, religious and philosophical- and to write about what he observes in a witty, yet reflective style.

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