JSC RusHydro has signed a deal that will see the Russian energy conglomerate manage and modernize a pair of hydroelectric projects in Nigeria.
Benefitting from the deal will be the 760-MKW Kainji and 578-MW Jebba hydropower plants -- both of which have suffered from decades of neglect.
The five-year agreement -- signed by a consortium comprised of RusHydro (LSE: HYDR) subsidiary RusHydro International AG and Mainstream Energy Solutions Ltd. of Nigeria -- follows efforts by owner Power Holding Company of Nigeria (PHCN) to revive the plants over the past several years.
As per the contract, RusHydro is responsible for the rehabilitation project's technical management and management of plant modernization.
Meanwhile, Mainstream Energy has committed to spend US$452 million for the project and will pay RusHydro a fixed fee for rendered services and additional remuneration for organization of tenders. RusHydro will not provide any financing for the work.
"Nigeria is a dynamic and a very promising market," said George Rizhinashvili, Deputy Chairman of the Management Board for RusHydro. "Providing management and engineering services allows us to leverage our expertise without committing financial resources."
Rizhinashvili said the company is interested in similar projects in other markets.
HydroWorld.com reported earlier this week that RusHydro had secured a $25 million loan from the Asian Development Bank (ADB) to modernize seven hydropower stations in Armenia's Sevan-Hrazdan Cascade.