FG Probes Zungeru Plant as Output Falls to Half Capacity
By Patience Ikpeme
The Federal Government has begun a regulatory review of the $1.3 billion Zungeru Hydropower Project to find out why the 700-megawatt (MW) plant is delivering only about 350MW to the National Grid.
The Infrastructure Concession Regulatory Commission (ICRC) announced this in a statement issued in Abuja on Thursday. The Commission said it will examine the contractual, legal and operational problems affecting the plant’s performance, with the aim of improving its efficiency and increasing the electricity it supplies to the grid. “As the regulator we are reviewing the terms of the concession to ensure all parties are keeping to the terms of the agreement and meeting up with their obligations,” the ICRC said.
The review brings together the Federal Ministry of Power, the Federal Ministry of Water Resources and Sanitation, the Bureau of Public Enterprises (BPE) and Penstock Limited, the private company operating the plant under a concession. The BPE acts as the grantor, that is, the government’s representative in the agreement, under a power of attorney from the Ministry of Power.
With an installed capacity of 700MW, Zungeru is a major government-backed power asset. It is now under formal scrutiny because it is working at roughly half of what it was built to produce.
Speaking at a stakeholders’ meeting in Abuja, the Director-General of the ICRC, Dr Jobson Oseodion Ewalefoh, said the Commission has a duty to ensure that Public-Private Partnership (PPP) assets deliver the benefits Nigerians expect from them. He said the meeting was called to identify what is standing in the way of the plant’s best performance and to work with the parties towards solving those problems. “PPP assets such as Zungeru could not be allowed to operate below capacity,” he said.
The review comes as the Federal Government steps up efforts to improve electricity supply and make better use of existing power infrastructure. President Bola Ahmed Tinubu has made increased power supply a major part of his administration’s plans to tackle Nigeria’s electricity challenges. In his 2026 Democracy Day speech, he described electricity as a “democratic dividend we owe every Nigerian.”
Dr Ewalefoh said the President’s commitment requires government institutions and private-sector partners in the power value chain to fulfil their responsibilities.
He explained that the ICRC was set up to regulate PPP arrangements and is not itself a party to the concession agreement between the government and the private operator. Its job, he said, is to monitor how PPP agreements are carried out and to make sure that both the government and the concessionaire keep to their contractual obligations.
Under Section 20 of the ICRC Act 2005, the Commission is responsible for keeping custody of concession agreements, monitoring compliance with their terms and ensuring that government concession contracts are implemented efficiently.
Dr Ewalefoh said that signing a PPP agreement does not by itself guarantee a project’s success. “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 are built on the sharing of risks and responsibilities between government and private investors, and are not a case of one side doing the other a favour. The regulator, he said, must therefore make sure the arrangement remains sustainable, that investors can earn reasonable returns, that services are delivered and that Nigerians get value from the asset.
The Zungeru review will also form part of a wider ICRC assessment of PPP-operated power projects across the country. Dr Ewalefoh disclosed that similar compliance reviews will be carried out on the Kainji, Jebba, Shiroro, Dadinkowa and Kashimbila power plants. The Commission intends to examine how these facilities are performing and the extent to which the contractual obligations governing their operations are being met. A final report from the reviews will be submitted to President Tinubu.
According to the ICRC, the exercise reflects its position that improving electricity supply is not only about building new generating capacity but also about making sure existing assets work efficiently. Dr Ewalefoh said efficiency was one of the main reasons government assets were handed over to private operators under PPP arrangements, and the Commission must therefore make sure the expected improvement is achieved through proper monitoring and compliance. The Commission also said it will review other existing PPP arrangements to determine whether they are performing as expected.
At the end of the Zungeru stakeholders’ meeting, the parties identified and documented the legal and operational issues affecting the project. They agreed to meet again at a later date to consider the issues further and work towards resolving the problems affecting the plant.
