Africa Finance Corporation and three Nigerian banks — United Bank for Africa Plc, First City Monument Bank Plc and Fidelity Bank — yesterday, stated that they committed a total of US$ 215 million (N34.4 billion) in form of a debt financing facility, for the acquisition of Ughelli Power Plc.
Ughelli Power Plc is a gas fired thermal power plant with installed capacity of approximately 972 mega watts. It was acquired by Transnational Corporation of Nigeria Plc, Transcorp, in the first round of the Federal Government’s privatisation of power generation assets formerly owned by the Power Holding Company of Nigeria, PHCN.
The AFC, in a statement made available to Vanguard, disclosed that the Ughelli power plant currently generates approximately eight per cent of the total electricity within the Nigerian national grid.
The AFC said its aggregate financing commitment for the acquisition is about US$55 million (N8.8 billion) while the UBA, FCMB and Fidelity banks provided the balance.
Commenting on the deal, Mr. Andrew Alli, President/Chief Executive Officer, AFC, said, “AFC’s long term vision is to help address Africa’s infrastructure deficit and ensure sustainable economic growth for the continent. Growth of the Nigerian economy cannot be fully realised without an efficient and functioning power sector.
“Power is one of AFC’s high priority sectors for investment, and arguably Africa’s most significant need. To this end AFC stands as both an advocate and support of privatisation of the power sector in Nigeria, and has partnered with the US Government through USAID in the US$7 billion United States’ Presidential “Power Africa Initiative” to accelerate investment in Africa’s power sector over the next five years and increase access to clean, geothermal, hydro, wind and solar energy.
“AFC’s investment in Ughelli power will contribute towards reducing Nigeria’s chronic power deficit, foster economic growth and create employment.
“AFC was created to address the infrastructure investment deficit and is privileged to be providing an African private sector investment solution, to drive economic growth and industrial development in Nigeria.”
Transcorp is the lead sponsor in the Transcorp Ughelli Power consortium, which will be purchasing 100 per cent of the shares in Ughelli Power.
Continuing further, Alli said the AFC fills a critical void in providing project structuring expertise and risk capital to address Africa’s infrastructure development needs, and is increasingly being seen as the benchmark institution for private sector investment in the core infrastructure sectors of power, natural resources, heavy industry, transport, and telecommunications.
Acquisition will boost economic devt — Elumelu
Also, Mr. Tony Elumelu, Chairman, Transnational Corporation of Nigeria, Transcorp, emphasised that the participation of Transcorp, in the power sector reform initiative of the federal government is to improve the living standards of all Nigerians as well as impact positively on the economy.
He disclosed that plans are underway by its subsidiary, Transcorp Ughelli Power Limited, TUPL, to increase the power generating capacity of the plant from 300MW to over 1070MW in the next five years.
He said, “This is a laudable and remarkable achievement, but it is only just the beginning. We can now embark fully on our strategy to contribute to the development of Nigeria’s power sector, whilst creating long term economic and social value for our stakeholders and the greater community. We fully expect our engagement on this world-class project to improve the living standards of all Nigerians as well as impact positively on our country’s GDP.”
Also commenting on the acquisition, Mr. Obinna Ufudo, President/Chief Executive Officer, Transcorp said, “Transcorp’s ability to achieve set goals and objectives propels us to target even larger investments in our selected business sectors with the potential to contribute significantly to Nigeria’s development.
Information from Vanguard was used in this report.