Nigeria on Saturday took a giant leap towards easing the country’s power woes by signing the contract for one of the country’s legacy power projects, the Zungeru Hydro-Electric Power Project.

Contract for the project, which will add 700 megawatts to the National Grid upon completion, was signed on behalf of the Nigerian Government by the Coordinating Minister for the Economy and Minister of Finance Dr Ngozi Okonjo-Iweala, while the Chinese Ambassador, Mr Deng Boqing, signed on behalf of his country. Ambassador Godknows Igali, Permanent Secretary of the Power Ministry represented the Minister, Professor Chinedu Nebo.

The contract will be executed by a consortium of two Chinese companies China National Electric and Engineering Corporation (CNEEC) and SinoHydro.

It is captured in the 2012-2014 Medium Term Borrowing Plan approved by the National Assembly.

The total cost of the project is $1, 293,573,013.08. 75% of the cost will be financed by a loan provided by the China Eximbank while the Federal Government has already paid 25% of the cost in the form of a counterpart fund.

The loan is obtained at a highly favourable concessional terms: 2.5% interest rate with a seven year grace period and 20 years maturity.

Dr Okonjo-Iweala explained that the project will have significant positive impact in many areas stressing that “it would create thousands of jobs for Nigerian engineers, technicians and artisans during the construction phase directly and indirectly. It would also boost the economy of the local economy in Zungeru as well as its environs.”

She stated that President Goodluck Jonathan had given all ministries and agencies involved in the project strict marching orders and that he expected it to be executed according to schedule.

“We are grateful to the Chinese Government for making this project a reality and we hope that the cordial relationship between Nigeria and China will continue to grow stronger for our mutual benefit.”

•Photo shows Dr Okonjo-Iweala, who signed on behalf of the Nigerian Government.