FG, Transcorp seal $350m investment deal to produce 966 megawatts

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The Federal Government and the Transcorp Power Consortium have signed a share sale and purchase agreement in relation to Afam Power Plc and Afam III Fast Power Ltd towards adding 966 megawatts of electricity to the national grid.

The signing took place at the presidential villa, Abuja on Thursday between the Director-General, Bureau of Public Enterprises (BPE), Alex Okoh and the Chairman of the Transcorp Group, Tony Elumelu, in the presence of Vice President Yemi Osinbajo, who is the chairman of the National Council on Privatization (NCP).

In his remarks, Osinbajo described the signing as a milestone in the government’s continued effort to accelerate reforms in the power sector.

He said the acquisition of Afam Power Plc and Afam III Fast Power Ltd by the Transcorp Power Consortium was the first of many new investments in the sector across the value chain from generation to distribution.

Osinbajo stated: “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 1000megawatts.

“The current usable and operational capacity of 240 megawatts from Afam III and about 100 megawatts from Afam Power PLC speaks of the opportunity that the transfer acquisition can bring.”

While urging Transcorp Power Consortium to take the opportunity of its ownership of the Afam Power Plant to raise the operations of the facility to its full capacity, the Vice President said the government would expect the consortium to bring its experience and expertise in the Ughelli Power Plant, which it acquired in 2013, to bear on Afam.

Osinbajo, who described Afam Power plant as an energy hub for Nigeria, said that it is a cluster that houses multiple power plants, including those owned by Shell Petroleum Development Company, SPDC, and Sahara Energy.

He further said: “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.”

Osinbajo assured that the Buhari administration would continue to work on its ease of doing business reforms to drive foreign investment, noting that local investors “are always the great litmus test for the investment environment.”

Also speaking, Director-General of the BPE, Okoh, said that Transcorp Power Consortium has committed to investing the sum of $350 million in the combined power assets.
According to him, 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 said: “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.”

On his part, the Chairman of Transcorp Group, Elumelu, said access to electricity was pivotal in lifting Nigerians out of poverty and in creating jobs.

He said the acquisition of the Afam Power Plant would be an opportunity for the Transcorp Group to contribute to government’s effort at improving on the lives of the people and in growing the economy.

Transcorp Power Consortium emerged the preferred bidder with a combined offer of N105 billion in a competitive bid that saw other 12 prospective investors.

The NCP had approved the privatization of the Afam Power Plant at its meeting held on August 22 and 23, 2017.

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