…as 1,500mw project gets lifeline
Nigeria has won a nine-year international arbitration battle against Sunrise Power and Transmission Company Limited over the long-delayed 1,500MW Mambilla Hydroelectric Power Project, defeating claims that put the country’s potential exposure at more than $3.38bn.
The project was originally conceived as a 3,050-megawatt hydroelectric plant in Taraba State, but the Federal Government later reduced the planned capacity by about 50 per cent to 1,525MW before subsequently rescoping it to about 1,500MW to make it financially viable and “bankable” for lenders.
Confirming the development on Thursday, President Bola Tinubu said in a State House statement that an International Arbitration Tribunal under the auspices of the International Chamber of Commerce in Paris, France, issued an award in Nigeria’s favour and rejected Sunrise’s claims.
The arbitration battle dates back to October 10, 2017, when Sunrise commenced proceedings against Nigeria at the ICC International Court of Arbitration over an alleged breach of a 2003 agreement concerning the development of the Mambilla power project.
Presidency said Sunrise demanded $680m as a settlement sum and interest in the latest arbitration relating to another case in which it is claiming more than $2.7bn in compensation and interest over disputes associated with the development of the Mambilla project in Taraba State.
Combined, the two related claims put Nigeria’s potential exposure at more than $3.38bn.
The final award issued on September 17, 2026, came nearly nine years after the company commenced arbitration proceedings against the Federal Government.
The President said the ruling had removed a major impediment that prevented the multibillion-dollar power project from progressing.
“Today’s ICC ruling clears the single biggest legal hurdle that has paralysed the Mambilla hydro power project for years,” Tinubu said.
According to TheCable, the three-member tribunal dismissed Sunrise’s claim for a declaration that Nigeria breached its contractual obligations under a settlement agreement and an addendum entered into by the parties.
The tribunal also rejected the company’s request for an order compelling Nigeria to pay $400m, comprising a settlement sum of $200m and another $200m claimed as a default payment.
The report added that the tribunal further declared that Sunrise promoter, Leno Adesanya, was bound by the arbitration agreement with Nigeria under the settlement agreement and addendum.
It consequently held that it had jurisdiction over Nigeria’s counterclaim against Adesanya and Sunrise. The tribunal also ordered Sunrise and Adesanya to reimburse Nigeria for 75 per cent of the legal fees and expenses incurred by the country in defending the arbitration.
Nigeria’s legal fees were put at $11.82m, of which $2.5m is expected to be covered directly from funds held in escrow by the ICC and released upon notification of the final award.
Sunrise and Adesanya were ordered to pay the outstanding $9.32m, alongside interest at an annual rate of 10 per cent, compounded annually from the date of notification of the final award until the amount is fully paid.
The arbitration costs were fixed at $1.66m, with Sunrise and Adesanya expected to bear 75 per cent while Nigeria would shoulder the remaining 25 per cent.
TheCable identified the three members of the tribunal as Melaine van Leeuwen, who presided over the panel, alongside Stavros Brekoulakis and Simon Nesbitt as co-arbitrators.
Nigeria was represented by a legal team led by Elizabeth Oger-Gross and Tolu Obamuroh of Paul Hastings LLP.
Tinubu commended the Attorney-General of the Federation and Minister of Justice, Lateef Fagbemi, alongside officials of the Federal Ministry of Justice, for their handling of the dispute.
He also praised the country’s legal team for what he described as its professional defence of Nigeria’s interests.
“This latest decision affirms the Nigerian State’s determination not to succumb to predatory and exploitative claims by corrupt local and international entities and their enablers and funders,” Tinubu said.
The President also hailed former President Olusegun Obasanjo and the late former President Muhammadu Buhari, who testified in Nigeria’s defence during the arbitration proceedings.
“I commend the patriotism and support of former President Olusegun Obasanjo, GCFR, and late President Muhammadu Buhari, GCFR, who testified in the case, which dated back to an illegal 2003 contract to build a 3,050-megawatt hydroelectric plant in Taraba State under a build-operate-transfer model. The Federal Executive Council never authorised the contract,” he said.
Tinubu also acknowledged former ministers, Babatunde Fashola and Suleiman Adamu, who participated as witnesses in the case, as well as experts involved in Nigeria’s defence.
He further commended the National Security Adviser for supporting the government’s case and the Economic and Financial Crimes Commission for its investigation into the dispute.
The dispute has its roots in an agreement reached more than two decades ago over the proposed development of the Mambilla power project. The 2003 contract provided for the construction of a 3,050-megawatt hydroelectric plant in Taraba State under a build-operate-transfer model.
In 2016, then Minister of Power, Works and Housing, Babatunde Fashola, described the project as one that would generate about 3,000MW.
But in February 2021, then Minister of Power, Saleh Mamman, announced that the Federal Government had revised the planned capacity downward by 50 per cent, from 3,050MW to about 1,525MW.
The stated reason was to reduce the project cost by about $1bn and make it more financially viable.
In July 2021, Mamman told the Senate Committee on Power that the project had subsequently been rescoped to 1,500MW to make it “bankable” and acceptable to lenders.
He said the original 3,050MW capacity was not considered financially viable under prevailing market conditions.
The original project was estimated at about $5bn–$5.8bn, while the rescoped project was reported at roughly 1,500–1,525MW and about $4bn.
The parties subsequently attempted to resolve the dispute through a settlement agreement in 2020.
But disagreement over the implementation of that settlement led to further arbitration, with Sunrise seeking payment from the Federal Government for allegedly failing to honour the agreement.
The Mambilla project itself has remained largely on the drawing board despite successive administrations identifying it as a major component of efforts to increase Nigeria’s electricity generation capacity.
The project has suffered repeated setbacks arising from legal disputes, financing challenges and changes to its implementation arrangements.
A Federal Ministry of Power implementation document had identified the arbitration, completion of financing arrangements with the Export-Import Bank of China and the need to re-scope the project among the challenges affecting its execution.
In the latest case, Tinubu assured that the government would continue to honour legitimate contractual obligations and work with genuine investors while defending the country against claims it considered unjustified.
“I want to assure you that while our country remains committed to partnering with genuine investors and honouring its legal obligations, it will continue to defend all opportunistic claims instituted against our commonwealth strongly,” the President said.
The arbitration victory also comes against the backdrop of Nigeria’s efforts to defend itself against multibillion-dollar international claims arising from disputed government contracts.
In 2023, Nigeria recorded another major legal victory when a United Kingdom court set aside an $11bn arbitration award obtained by Process & Industrial Developments Limited over a failed gas processing agreement.
