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Nigeria risks $400m fine over Mambilla power project as firm drags FG to Int’l court2mins read


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THE completion of Nigeria’s multibillion naira Mambilla Hydro Project could hit the rocks after a Nigerian company that lost out in the contract bid filed a $400 million lawsuit against the Federal Government.

The lawsuit filed by Nigerian-owned Sunrise Power and Transmission Company Limited (SPTCL) at the International Chamber of Commerce (ICC) in Paris, France, requested the court to order President Muhammadu Buhari’s administration to honour its March 2020 agreement.

The company’s request for an award of $400 million with an interest of 10 per cent was initiated under the ICC’s expedited procedure rules, as specified in the agreements, and should be decided within six months.

The SPTCL claimed it  was awarded the contract to build and operate the 3,050-megawatt hydropower facility in 2003, which was followed by the signing of a General Project Execution Agreement (GPEA) with the government in November 2012.

The project was scaled to a 1,525-megawatt hydropower facility at $4 billion, but SPTCL was sidelined in the project by the Ministry of Power, Works and Housing.

Former Minister of Power Babatunde Fashola had granted the same contract in 2017 to three Chinese companies, Sinohhydro Corporation of China, China Ghezouba Group Corporation of China and China Geo-Engineering Group Corporation, to form a joint venture for the execution of the project.

The China Exim Bank was expected to provide 85 per cent of the joint funding with the Federal Government for the Mambilla project, but the bank insisted it  would not release the money until the legal standoff ended.

This prompted SPTCL to start court proceedings against Nigeria’s government at the ICC, demanding between $960 million and $2.4 billion in damages.

A settlement agreement was reached with SPTCL last year where $200 million was promised, in return for it dropping all claims relating to Mambilla.

It was also agreed that the Lagos-based firm would be entitled to an additional $200 million-plus interest if the government failed to transfer the agreed sum within 180 days.

President Buhari decided that his administration couldn’t pay the settlement sum, according to a memorandum in August 2020, because low oil prices were hitting the economy due to the outset of the coronavirus.

Initially, the project was conceived in 1982 as a 3,050-megawatt plant on the Donga River, Taraba State to cost $5.8 billion, but it got off to multiple false starts. When completed, the Mambilla project will increase the installed electricity-generating capacity of the country by 12 per cent.

However, findings by The ICIR show that SPTCL is co-owned by Laitan Adesanya, who also doubles as chief executive officer of Lenoil Nigeria Limited, and his wife Ibironke Adesanya, based on a Corporate Affairs Commission (CAC) company search.

In 2016, Adesanya was arrested by the Economic and Financial Crimes Commission (EFCC) for his alleged role in the disbursement of $115 million (N23bn)  funds allegedly used to bribe some officials of the Independent National Electoral Commission (INEC) before the 2015 presidential election.

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Adesanya was alleged to have handed $1.85 million to Fidelity Bank based on the instruction of a former Minister of Petroleum Resources, Diezani Alison-Madueke.

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