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The Chinese government has asked the federal government of Nigeria to settle the legal dispute over the $5.8 billion Mambilla power project or it would not provide funds for the project.
The China Gezhouba Group Corporation of China (CGGCC) and China Geo-Engineering Group Corporation (CGGC) had in 2006 won the bid for a joint venture to execute the hydropower project with a proposed capacity of 3,050 megawatts.
But in 2003, the Federal Ministry of Power had awarded the build, operate and transfer (BOT) contract of the project to Sunrise Power and Transmission Company Limited (SPTCL), a local content partner.
As a result, SPTCL filed a suit against the federal government and its Chinese partners at the International Chamber of Commerce (ICC) in Paris, France, over an alleged breach of contract.
Due to the ongoing legal tussle, Nigeria risks $2.3 billion fine over the proposed 3,050-megawatts facility.
In a letter addressed to the Minister of Power, Mr. Sale Mamman, the Project Manager for the Chinese partners, He Yongjun, said the China Exim Bank, which is expected to provide 85 per cent of the joint funding, will not finance the project until the legal issues are resolved.
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