In a bid to accelerate reforms in the power sector, the Federal Government Thursday singed sale and purchase agreement for the Afam Power Plant with one of Nigeria’s leading corporations, Transcorp, in Abuja.
Speaking at the signing of the agreement, the Vice President, Professor Yemi Osinbajo, said the investment by Trancorp in acquiring Afam Power PLC and Afam III Fast Power Ltd is the first of many new investments in the sector across value chain from generation to distribution.
According to him, “Today (Thursday) is a milestone in our continued effort to accelerate reforms in the power sector. The investment by Trancorp in acquiring Afam Power PLC and Afam III Fast Power Ltd is the first of many new investments in the sector across value chain from generation to distribution.
“The Buhari administration’s goal is to eliminate the challenges in the power sector by improving liquidity in the market through a host of measures, including the recently announced national mass metering programme and the transition to a service-based tariff.
“We need a power sector that can provide quality service to Nigerian consumers and sustain itself. The Afam Power PLC and the Afam III Fast Power Ltd have a combined capacity of almost 1000MW. The current usable and operational capacity of 240 megawatts from Afam III and about 100megawatts from Afam Power PLC speaks of the opportunity that the transfer acquisition can bring.
“We expect that under Transcorps ownership the operational capacity of the facility would be raised to its full capacity. We have seen the progress that Transcorp has made with the Ughelli Power Plant in raising the operational capacity significantly since it acquired the plant in 2013. And we expect nothing less in this acquisition.
Speaking further he said; “the Afam cluster houses multiple power plants outside of those being acquired today by Transcorp, including those owned by Shell Petroleum Development Company and Sahara Energy. It is an energy hub for the country. We have no doubt that the addition of Transcorp to the community will come with the forward thinking Corporate Social Responsibility initiative that the chairman of Transcorp, Mr. Tony Elumelu and his team are known for.
“We continue to work on our ease of doing business reforms to drive foreign investment, but our local investors are always the great litmus test for the investment environment. This transaction is a confirmation of the reform trajectory of this government, especially in the power sector. Wished Elumelu and Transcorp success in their investments.
Also speaking at the event, Alex Oko said, “the conclusion of this transaction, coupled with the significant effort being made by the Federal Government in conjunction with multilateral agencies and private sector investors demonstrate a firm resolve on the part of this administration to promote an efficient electricity supply industry in order to meet the country’s demand and drive the process of socio-economic growth and development of the Nigerian economy.
Giving the background of the transaction he said, “At its meeting held on the 22nd and 23rd August, 2017, the NCP approved the privatization of Afram Power. In view of this and following a competitive bidding, which involved the participation of 12 prospective investors, Transcorp Power Consortium emerged as the preferred bidder with a combined offer of N105billion. It is pertinent to note that other bidders at the financial bidding opening ceremony attested to the professionalism, transparency and fairness of the process and applauded the federal government represented by the Bureau of Public Enterprises for a job well done.
“The reform and privatization programme of this administration is not about simply divesting public enterprises to the private sector. Government, through the BPE, is also concerned about entrusting these assets to credible investors who possess the requisite technical and financial capacity to ensure that these enterprises and assets perform optimally and deliver quality services to the Nigerian people.
“Transcorp Consortium is one of the success stories of the Nigerian privatization programme. Through its investment in Transcorp Hotel and Ughelli Power Ltd, the consortium has consistently achieved its performance targets as contained in the respective acquisition plans.
“In this particular instance, Transcorp Power Consortium has signaled an ambitious development plan for Afam Power and has committed to investing the sum of US$350million in the combined power assets for this purpose. In addition to the new Afam III Fast Power Plant with an installed capacity of 240megawatts, the consortium has committed to ramp up power generation of the plant to its rated capacity of 726megawatts within a period of five years, thereby adding an aggregate of 966 megawatts to the national grid”, he concluded.
Meanwhile, Chairman of Transcorp Consortium Mr. Tony Elumelu reiterated that access to electricity is very vital to bring out many Nigerians from poverty.
Said he, “access to electricity is very pivotal in lifting our people out of poverty. Government has demonstrated its commitment to this. We are very committed to improving lives and transforming our economy. And we believe that the clear first step in that direction is to improve access to electricity. Access to electricity will help us address poverty or eradicate poverty.
“Access to electricity will help us create jobs for our people. And the kind of things we see in the country will be a thing of the past. We welcome this opportunity; we see it as a huge responsibility on us to play and contribute our quota in making sure that government’s genuine concern of lifting Nigerians out of poverty; the government’s genuine commitment to creating jobs; we would contribute our own quota in making that happen.
“Mr. Vice President, I want to thank you and commit, on behalf of my team, we take it very seriously and we want to make sure that the commitment to adding 966megawatts to our national grid in three to five years, that we will achieve it once the transmission lines are stable”, Elumelu assured the government.
