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Two Chinese electric power firms, China National Electrical Equipment Corporation (CNEEC) and Sinohydro Consortium will operate the Zungeru Hydroelectric Power Project located150 km away from the capital city Abuja.
China’s Exim Bank would finance 75 per cent of the cost of the project.
The balance of $309 million had been made available by Nigeria, asserted the country’s Minister of Finance Ngozi Okonjo-Iweala.
The power plant is expected to generate 700 megawatts of power for Africa’s most populous country and will be ready by 2018.
“The project will create thousands of jobs during the construction phase both directly and indirectly. A lot of Nigerian technicians, engineers and artisans and others will be employed during the construction phase,” added Okonjo-Iweala.
Nigerian President Goodluck Jonathan and his Chinese counterpart, Xi Jinping, had in July this year presided over the signing of accords between their governments to facilitate $1.1bn in low-interest loans for infrastructure projects in Nigeria.
China has helped fund airport terminals in four cities, roads, a light-rail line for its capital, a hydropower plant and oil and gas infrastructure in Nigeria.
The Nigerian Finance Minister who accompanied Jonathan to Beijing said the loans being finalised during the trip were part of $3bn approved by China at interest rates of less than 3 percent.
The most populous African nation has seen growth rates of above 7 per cent for most of the past decade.
“China and Nigerian share the same dream, that is to bring prosperity and stability to the people, and these visions have been fully communicated by the leaders of our two countries when President Goodluck Jonathan visited China in July 2013,” said the Chinese Ambassador to Nigeria Deng Boqing after signing the deal.
He said the project, when completed, will aid in supplying the power needed for the “economic transformation to achieve Nigeria’s “2020:20 vision”.
The Zungeru Hydroelectric Power Project was conceived in 1982 but was mired in a funding crisis.
The deal finally approved by the Nigerian government in 2012, would be the largest to be built by the administration of Goodluck Jonathan.
China has in recent years stepped up its participation in investment and financing of major projects across the African continent.
Nigeria, alongwith South Africa, are two of the most powerful economies in the continent.
The BRICS Post with inputs from Agencies