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, which is expected to add 966 megawatts to the national grid.
The deal was signed yesterday by the director-general, Bureau of Public Enterprises, BPE, Alex Okoh and the chairman of the Transcorp Group, Tony Elumelu, at a brief ceremony in the State House, witnessed by vice president, Yemi Osinbajo, who is the chairman of the National Council on Privatisation (NCP).
The NCP had approved the privatisation of the Afam Power Plant at its meeting held on the 22nd and 23rd August, 2017.
Following the approval, a competitive bidding for the plant, involving 12 prospective investors, was held with Transcorp Power Consortium emerging the preferred bidder with a combined offer of N105 billion.
Speaking at the signing ceremony, Prof Osinbajo said the event was a milestone in the Nigerian 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 value chain from generation to distribution.
Osinbajo said, “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 100 megawatts from Afam Power Plc speaks of the opportunity that the transfer acquisition can bring.”
Charging 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 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.
Describing the Afam Power plant as an energy hub for Nigeria, the Vice President said that it is a cluster that houses multiple power plants, including those owned by Shell Petroleum Development Company (SPDC), and Sahara Energy.
“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 said.
He said 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.”
Speaking at the event, director-general of the BPE, Alex Okoh, said that Transcorp Power Consortium has committed to investing the sum of $350 million in the combined power assets.
According to Okoh, 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 726 megawatts within a period of five years, thereby adding an aggregate of 966 megawatts to the national grid.
He said, “The reform and privatisation 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.”
Also speaking, 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.