The Mambilla Hydroelectric Power Project, a proposed 3,050-megawatt facility in Taraba State, has been embroiled in a long-standing dispute between the federal government and Sunrise Power and Transmission Company Limited. The project, which dates back to a 2003 agreement, was to be constructed on a build-operate-transfer basis. However, the agreement soured, leading Sunrise to commence arbitration against Nigeria in 2017, demanding about $2.35 billion.
In January 2020, a settlement was reached, under which Nigeria was to pay Sunrise $200 million. A further $200 million default provision was introduced in March 2020, potentially raising Nigeria's exposure to $400 million plus interest. The settlement negotiations have been defended by former Attorney-General of the Federation, Abubakar Malami, as an attempt to protect Nigeria's interests and end prolonged litigation.
Malami's successor, Lateef Fagbemi, has offered a contrasting view, stating that the dispute had held the Mambilla project "hostage" and contributed to the country's energy challenges. Fagbemi's comments come after an International Chamber of Commerce arbitration tribunal in Paris delivered a final award on September 16, rejecting Sunrise Power's claims against Nigeria and ordering the company and its promoter, Leno Adesanya, to reimburse the Federal Government $11.82 million in legal fees and $414,125 in arbitration costs.
Malami has rejected suggestions that his actions as AGF were motivated by a corrupt agreement or the prospect of personal financial benefit. He stated that the dispute predated his tenure and had passed through several administrations, attorneys-general, and government ministries. According to him, the government's consideration at the time was whether an "asserted multibillion-dollar exposure, continuing litigation, financing difficulties and delays to the Mambilla project could be brought to an end through a substantially smaller negotiated settlement."
Malami also stressed that the $200 million settlement was never paid to Sunrise and said there was no evidence before the tribunal linking him to any financial benefit from the proposed arrangement. He further acknowledged that former President Muhammadu Buhari did not approve the payment, adding that Buhari subsequently directed government lawyers to resist Sunrise's attempt to enforce the settlement against Nigeria.
The former AGF cautioned against interpreting the tribunal's findings as a criminal conviction, noting that the proceedings were commercial arbitration between the parties to the dispute. Malami's comments come as a response to the controversy surrounding his role in the settlement negotiations. The Mambilla project's development has been stalled due to the ongoing dispute, contributing to Nigeria's energy challenges.
The contrasting views of Malami and Fagbemi highlight the complexities surrounding the Mambilla project and the $200 million settlement. The project's future remains uncertain, with the government yet to determine its next course of action. The dispute has significant implications for Nigeria's energy sector, with the country in dire need of increased power generation and supply.
Key points
- The Mambilla Hydroelectric Power Project has been stalled due to a long-standing dispute between the federal government and Sunrise Power and Transmission Company Limited.
- Former Attorney-General Abubakar Malami and his successor Lateef Fagbemi have offered contrasting views on the $200 million settlement negotiations.
- The International Chamber of Commerce arbitration tribunal's final award rejected Sunrise Power's claims against Nigeria and ordered the company to reimburse the Federal Government $12.234 million in costs.
