The Federal Government has begun a regulatory review of the $1.3bn Zungeru Hydropower Plant in Niger State after its electricity output fell to about half of its installed capacity.

The 700-megawatt facility is currently generating approximately 350MW for the national grid, prompting the Infrastructure Concession Regulatory Commission (ICRC) to intensify oversight aimed at identifying and resolving the issues affecting its performance.

The commission disclosed the development after convening a stakeholders’ meeting in Abuja involving the Federal Ministry of Power, the Federal Ministry of Water Resources and Sanitation, the Bureau of Public Enterprises and Penstock Limited, the private concessionaire operating the plant.

The meeting was organised to examine the legal, contractual and operational challenges limiting the facility’s output and determine measures to improve its performance.

ICRC Director-General, Jobson Oseodion Ewalefoh, said the government could not allow strategic power infrastructure operated under public-private partnership arrangements to continue generating below its potential.

He said the commission’s intervention was intended to ensure that the parties involved fulfilled their obligations under the concession agreement and that the plant delivered greater value to Nigerians.

The Zungeru Hydropower Plant is located along the Kaduna River in Niger State. It has four generating units rated at 175MW each, giving it a combined installed capacity of 700MW.

The project, estimated to have cost $1.3bn, was developed to increase Nigeria’s electricity generation capacity and strengthen the national grid. It is also designed to support other activities, including flood control and irrigation.

The facility is operated by Penstock Limited under a public-private partnership arrangement following the Federal Government’s transfer of operational responsibility to the concessionaire in 2024. The government, through the ICRC, retains a regulatory role in monitoring compliance with the agreement.

Ewalefoh said the review would not amount to taking over the concession agreement but would focus on ensuring that its terms were properly implemented and that the plant operated efficiently.

The commission also indicated that similar compliance reviews would be conducted on other power projects operating under public-private partnership arrangements, including Kainji, Jebba, Shiroro, Dadinkowa and Kashimbila. Findings from the reviews are expected to be compiled into a report for President Bola Tinubu.

The review comes as Nigeria continues to grapple with inadequate electricity supply despite having significant installed generation capacity. The government is seeking to improve output from existing infrastructure alongside other efforts to address the country’s power challenges.

At the end of the Abuja meeting, stakeholders identified issues affecting the Zungeru plant and agreed to reconvene for further discussions. The ICRC said the process would lead to measures aimed at improving the facility’s performance and ensuring that the investment delivers more electricity to the national grid.