The Mambilla Hydropower Project situated in Kakara, Taraba State, with an anticipated capacity of 3,050 megawatts, was initially envisioned as a game-changer in Nigeria’s energy sector, but has been marred by controversies and legal disputes over the years.
Former President Olusegun Obasanjo, in a recent interview, claimed that a former Minister of Power and Steel, Olu Agunloye, had awarded the project’s contract fraudulently without obtaining Federal Executive Council (FEC) approval.
Obasanjo further stated that no minister during his administration had the authority to sign such a massive contract without his consent.
Agunloye, on Sunday, accused former President Olusegun Obasanjo of distortion of facts over the stalled multi-billion-dollar Mambilla Hydropower Project.
Contesting Obasanjo’s assertions, Agunloye provided a detailed account of the project’s nature and initiation during Obasanjo’s presidency.
He said that the project’s original agreement was based on a Build, Operate, and Transfer (BOT) model, relieving the Nigerian government of any financial obligations.
According to Agunloye, Obasanjo’s subsequent decision to advocate for direct government funding deviated from the original BOT contract, fundamentally altering the project’s trajectory.
This deviation eventually led to the termination of the project by President Umaru Musa Yar’Adua in 2008, citing corruption allegations against officials who served under Obasanjo’s administration from 2003 to 2007.
“The former president was not correct when he referred to the award to Sunrise simply as a $6 billion contract (that is, N800 billion in 2003) under his watch. In truth, it was a Build, Operate and Transfer (BOT) contract in which the FGN did not need to pay any amount to the contractor, Messrs Sunrise Power and Transmission Company Limited (Sunrise).
“As a matter of fact, Sunrise has not been paid a single Naira or Dollar by the FGN from 2000 till date (14/9/23). Sunrise was to source for funds and execute the project with own funds. The investment of Sunrise to construct the Mambilla hydroelectric project up to the completion stage to deliver electricity was adjudged at a maximum of $6 billion by four Ministers of Power and the former president (Chief Obasanjo) before I became Minister of Power. Sunrise was to recoup its investment from the sale of the generated electricity over a 30- to 40-year period at pre-determined tariffs, also agreed with FGN before May 2003.”
“The former President decided, therefore, to break the Mambilla Hydropower Project into smaller components, like civil engineering works, hydraulic works, structural works etc. with the intention to award them as separate multiple contracts as Government procurements, on cash and carry basis, for which Nigerian Government would pay mobilisation fees and make other payments in stages to contractors.
“When one of the contractors, which got a component of the Mambilla project awarded by President Obasanjo as $1.46 billion procurement contract, presented its request for a $400 million mobilisation fees, President Yar’Adua scrutinised the contract and cancelled it in 2008 because of proven corruption on the part of officials who served under President Obasanjo between 2003 to 2007,” Agunloye said.
Sunrise Power and Transmission Limited subsequently initiated legal action, claiming the termination was illegal and disrupted their ability to recoup their investment, as stipulated in the initial BOT contract.
The former Minister added: “I have submitted a 53 paragraph, 14-page Statement backed with 15 Attachments in 82-page document as an affidavit to the courts in Nigeria and France in respect of the Mambilla Power Project to clear my name. In deference to Pa Obasanjo and as a mark of great respect to the former President, I have sent a copy of these documents through my lawyers to him to refreshen his memory.”