The Federal Government has signed the contract for the Zungeru Hydro-Electric Power Project, which will add 700 megawatts (MW) to the national grid, when the project is completed.

The cost of the project is $1,293,573,013.08 and 75 per cent of this would be financed by a loan provided by the China Eximbank. The Federal Government has paid 25 per cent of the cost as a counterpart fund.

The Coordinating Minister for the Economy and Minister of Finance, Dr Ngozi Okonjo-Iweala, signed for Nigeria while Chinese Ambassador Deng Boqing signed on behalf of his country.

The Zungeru Hydro-Electric Power Project is considered one of the country’s legacy power projects, and the contract will be executed by a consortium of two Chinese companies China National Electric and Engineering Corporation (CNEEC) and SinoHydro.

A statement by Paul Nwabuikwu, the Special Adviser to the Coordinating Minister for the Economy, said the project was captured in the 2012-2014 Medium Term Borrowing Plan approved by the National Assembly.

The statement said: “The loan is obtained at a highly favourable concessional terms of 2.5 per cent interest rate with a seven-year grace period and 20 years’ maturity.”

Dr Okonjo-Iweala, the statement said, explained that the project would have significant positive impact in many areas.

She said: “It would create thousands of jobs for Nigerian engineers, technicians and artisans during the construction phase directly and indirectly. It would also boost the local economy in Zungeru as well as its environs.”

The minister added that President Goodluck Jonathan had given ministries and agencies involved in the project the marching orders and that it should be executed according to schedule.