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Transcorp buys Afam power plant

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The Federal Government on Thursday signed a share sale and purchase agreement with Transcorp Power Consortium in relation to Afam Power Plc and Afam III Fast Power Ltd.

The agreement, which is expected to lead to the addition of 966MW to the national grid, was signed at the Presidential Villa, Abuja.

The Director-General, Bureau of Public Enterprises, Alex Okoh, signed on behalf of the Federal Government while the Chairman of Transcorp Group, Tony Elumelu, signed for the firm.

Vice President Yemi Osinbajo, who is the chairman of the National Council on Privatisation, witnessed the ceremony.

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

Transcorp Power Consortium emerged the preferred bidder with a combined offer of N105bn .

At the brief ceremony, Osinbajo described the signing of the agreement as a milestone in the Federal Government’s continued effort to accelerate reforms in the power sector.

He further described the acquisition of the two power plants as the first in the many new investments in the sector across value chain from generation to distribution.

He 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 240MW from Afam III and about 100MW from Afam Power Plc speaks of the opportunity that the transfer acquisition can bring.”

Osinbajo urged the firm to seize the opportunity of its ownership of the Afam Power Plant to raise the operations of the facility to its full capacity.

He 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.

“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 assured stakeholders that the present regime 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’.

Okoh disclosed that Transcorp Power Consortium had committed to investing $350m in the combined power assets.

According to Okoh, in addition to the new Afam III Fast Power Plant, with an installed capacity of 240MW, the consortium has committed to ramp up power generation of the plant to its rated capacity of 726MW within a period of five years, thereby adding an aggregate of 966MW 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.”

Elumelu described access to electricity as 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.

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