The Federal Government has commenced a regulatory review of the $1.3 billion Zungeru Hydropower Project to establish why the 700-megawatt (MW) facility is generating only about 350MW for the National Grid.
According to a statement issued by the Infrastructure Concession Regulatory Commission (ICRC) in Abuja on Thursday, the review will focus on the contractual, legal and operational challenges limiting the plant’s performance.
The Commission said the exercise is aimed at improving the facility’s efficiency and increasing the volume of electricity it supplies to the national grid.
According to the ICRC, “as the regulator we are reviewing the terms of the concession to ensure all parties are keeping to the terms of the agreement and meeting up with their obligations “
The move brings the Federal Ministry of Power, the Federal Ministry of Water Resources and Sanitation, the Bureau of Public Enterprises (BPE), and Penstock Limited, the concessionaire operating the plant, together to find solutions to the problems affecting its output.
The BPE acts as the grantor under the power of attorney from the Ministry of Power.
The ICRC’s intervention means that a major government-backed power asset with an installed capacity of 700MW is now under formal regulatory scrutiny because it is operating at roughly half of its potential capacity.
Speaking at a stakeholders’ meeting in Abuja, ICRC Director-General Dr Jobson Oseodion Ewalefoh said the Commission is responsible for ensuring that PPP assets deliver the benefits expected of them.
He said the meeting was convened to identify the issues standing in the way of Zungeru’s optimal operation and work with the relevant parties towards resolving them. “PPP assets such as Zungeru could not be allowed to operate below capacity,” Ewalefoh said.
The regulatory review comes as the Federal Government intensifies efforts to improve electricity supply and make better use of existing power infrastructure.
President Bola Ahmed Tinubu has made increased electricity supply a major part of his administration’s efforts to address Nigeria’s power challenges. In his 2026 Democracy Day speech, he described electricity as a “democratic dividend we owe every Nigerian.”
He explained that the ICRC was created to regulate PPP arrangements and was not a party to the concession agreement between the government and the private operator.
He said its responsibility was to monitor the implementation of PPP agreements and ensure both the government and concessionaire complied with their contractual obligations.
Under Section 20 of the ICRC Act 2005, the Commission keeps custody of concession agreements, monitors compliance with their terms, and ensures government concession contracts are implemented efficiently.
Ewalefoh said entering into a PPP agreement was not enough to guarantee the success of a project, as the real benefits depended on proper implementation of the obligations agreed by the parties. “Signing a concession agreement is only the first step; implementation of the terms in the PPP agreement is what delivers results,” he said.
He explained that PPP arrangements are designed to share risks and responsibilities between the government and private investors, rather than one party simply doing the other a favour.
The regulator, he said, must therefore ensure the arrangement remains sustainable, investors can achieve reasonable returns, services are delivered, and Nigerians get value from the asset.
The Zungeru review is also expected to form part of a wider ICRC assessment of PPP-operated power projects across the country.
Ewalefoh said similar compliance reviews would be carried out on the Kainji, Jebba, Shiroro, Dadinkowa and Kashimbila power plants.
The Commission intends to examine the facilities’ performance and the extent to which they are meeting the contractual obligations governing their operations.
The ICRC says it will submit a final report from the reviews to President Tinubu.
The broader exercise reflects the Commission’s position that improving Nigeria’s electricity supply is not only about constructing new generating capacity but also about ensuring that existing assets operate efficiently.
Ewalefoh said efficiency was one of the main reasons the government transferred assets to private-sector operators under PPP arrangements. The ICRC, he added, must therefore ensure that proper monitoring and compliance deliver the expected efficiency gains.
The Commission also said it would review other existing PPP arrangements to determine whether they are performing as expected.
At the end of the Zungeru stakeholders’ meeting, the parties identified and documented the legal and operational issues affecting the project.
They agreed to reconvene later to consider the issues further and work toward resolving the constraints affecting the plant.
