Nigeria recently announced the production of a $5.8 billion hydropower plant. For many, this is a welcome move by the government of Nigeria: a long overdue step towards deviating away from fossil fuels and rectifying the energy crisis that has plagued the country for decades. The hydroplant, which comes as a result of Chinese foreign direct investment, will have the capacity to generate 3,050 megawatts – more than double the country’s current hydro potential.
The announcement of the deal comes at a time when developing countries are struggling to obtain funds for the construction of fossil fuel power plants. In particular the World Bank has rejected power projects that involve the use of coal, encouraging fund applicants to focus on solar or wind energy. As such, the construction of the plant is a logical development for Nigeria’s energy sector.
Serious energy problems
For years, the country has struggled to generate sustainable electricity for its population of 186 million. According to reports, less than half the population has access to electricity, and even then it’s unreliable. The country has one of the lowest levels of electricity consumption per capita in Africa, estimated at less than 150 kilowatt hours. A report from Power Africa, a US government initiative, shows that while Nigeria has 12.5 gigawatts of installed generation capacity, only 3,500-5,000 megawatts is available for use.
Investigations into the state of the nation’s power sector have found it is beset with various problems, including inadequate and limited facilities, incidents of vandalism, poor gas quality, and a severe lack of funds. The security situation in the Niger Delta has also exacerbated supply difficulties as continued attacks on pipelines have caused a shortage of gas to thermal power stations around the country. The issues within the energy sector were addressed by the Power, Works and Housing Minister, Babatunde Fashola, who stated that these issues were key factors in perpetuating the poor state of the energy sector.
But even if the power sector’s challenges were solved, reports show that the industry would require three to five years to create new power plants – along with additional infrastructure needed to increase power generation. Many Nigerians have restored to using generators instead of relying on the country’s national grid: it is one of the largest importers of generators for private use on the continent. While this provides a short term solution, dependency on private generators only serves to undermine the country’s attempts to utilise more environmentally friendly sources of energy. Though the plant is intended to help rectify this, its impeding construction may bring its own problems.
Not a perfect solution
The location where the hydroplant is supposed to be built is one of the areas in which violent clashes between Fulani herdsman and farmers have taken place. The two groups have been fighting over access to grazing land and the ensuing violence led to the deaths of over 1,000 people in 2016. The building of the dam will no doubt exacerbate tensions within the region, and could result in continual delays if the construction site or workers are targeted by herdsman militants. This is a development that both China and the Nigerian government will have to monitor if they want their project to come to fruition.
The announcement of the dam has also alarmed environmental groups who are concerned over the level of pollution the hydroplant may cause. International Rivers, an environmental organisation, criticised the Goodluck administration’s failure to secure previous deals and warned of the impending environmental damage: “If the Mambilla dam project does continue, it could mean disastrous environmental and social impacts for those already living in poverty along the banks of the Benue River”
In light of these impending problems, Nigeria is also looking at renewable alternatives such as solar energy. Speaking to the press, Fashola reiterated the government’s commitment to utilise renewable energy sources to generate the nation’s power supply: possibly an attempt to cater to the policy direction of the World Bank. In early May, Nigeria requested an advancement of $5.2 billion from the organisation. The World Bank loan is not only for projects that aim to bolster the energy sector, but to aid in the economy’s recovery after its first economic contraction in 25 years.
But there appears to be a split in the government over which energy resources should be utilised. In 2016, Nigerian Finance Minister Kemi Adeosun expressed frustration towards Western nations for deterring Nigeria from generating electricity through the use of coal: “We want to build a coal power plant. However, we are being blocked from doing so, because it is not green. This is not fair because they have an entire Western industrialisation that was built on coal-fired energy”. While it is possible the government may have changed its stance towards fossil fuel energy, Ms. Adeosun’s remarks reflect a common sentiment amongst developing nations who are told by the West to seek alternative sources of energy.
There is also a considerable risk of Nigeria falling into debt. The construction of the hydroplant is just one of the means Nigeria is using to expand electricity generation. Alongside Chinese foreign investment, Nigeria is looking for sources of revenue both from home and abroad. Alongside the request for extra cash from the World Bank, there have also been talks that the Bank’s private sector lending body, the International Finance Corporation, may invest around $1.3 billion in Nigeria’s power projects and electricity distribution companies. This continued borrowing will place Nigeria in a vulnerable position should the power project deals collapse or remain uncompleted. Given the numerous pre-existing conditions that have hampered Nigeria’s energy sector for years, it will likely take more than an expensive hydroplant to resolve the country’s energy crisis – and the socio-economic woes that come with it.