People & Money

Osinbajo Commissions Afam III Fast Power Plant, Announces Transcorp’s Bid for AEDC

On Tuesday, the 9th of May, Vice President Yemi Osinbajo was in Rivers State for the commissioning of a new power plant, the Afam III Fast Power Plant. Transafam Power Limited, a subsidiary of Transcorp Plc, controls the plant.

With the addition of the 240 MW power plant, the cumulative generation capacity of Transafam Power Limited is brought to 966 MW.

Also Read: Tony Elumelu Says Transcorp to Power 25% of Nigerian Homes

During the commissioning of the plant, Vice President Yemi Osinbajo announced that the National Council on Privatisation (NCP) approved Transcorp Power as the preferred bidder for the Abuja Electricity Distribution Company (AEDC). Osinbajo also mentioned that the power sector in Nigeria has shown significant progress during the current administration, but highlighted that there are still outstanding challenges that require attention in the sector. He stated that a significant drawback of Nigeria’s privatization process was the insufficient amount of private investments and fresh capital injections.

Prof. Osinbajo while speaking at the event noted, “The tide is turning, with indigenous power and private investment such as Transcorp Power and Heirs Holdings making significant investments such as this 100 per cent acquisition of 966MW a strong capacity Afam Plc, Afam III Fast Power jointly referred to as the Afam Genco, an acquisition cost of about N105.8 billion,

However, he expressed regret that despite possessing one of the world’s largest gas reserves, the gas supply and security for the power sector have remained unstable and are impeding reform. He stated that the Nigerian Electricity Regulatory Commission (NERC) established a Gas Supply Stabilization Fund of N40 billion in 2022. The purpose of the fund is to provide payment security in advance to all gas suppliers in the Nigerian Electricity Supply Industry (NESI).

He noted, “Unfortunately, the payment security has not led to improved supply certainty. So, I encourage gas producers and gas suppliers to have a fundamental rethink about supply security and propose ways to ensure our gas supply can improve and meet the gap and growing demands of the Nigerian Electricity Supply Industry.”

“Some areas to further explore will be to depend perhaps more on non -associated gas and specific gas fields to supply the power industry on more and more liberalised rates.”

Also Read: Otedola’s Transcorp Takeover: What’s the Billionaire’s Game Plan?

Transcorp Power had been in the news for a while. During the NCP’s meeting on Monday, the federal government and the NCP provided Transcorp Power Limited with its post-privatization discharge certificate. The certificate indicates that the power company has satisfied all privatization requirements and will no longer be subject to post-privatization monitoring.

At the event, Osinbajo praised Transcorp Power for its significant contribution to the power sector.

He noted, “…the last few days belong to Transcorp Power because, at the same meeting of the National Council on Privatisation, the council approved Transcorp Power Consortium as the preferred bidder for the acquisition of the Abuja Disco,

“Also to Tony Elumelu, the serial power investor and the entire Transcorp team for yet another power sector investment, I am confident that we have all that is required to create one of the best power markets. I am also confident that it will happen within our lifetime,” he added.

Tony Elumelu, the Chairman of Transcorp Plc also spoke at the event. He emphasized the crucial role of electricity in the country’s development and urged the incoming administration to increase the gas supply to power plants. Noting that it will enable the country to enhance its power generation capacity.

Elumelu said, “We all know the importance of power in Nigeria.  We all experience the consequences of our power deficit – the implications for our people, our businesses, our schools, hospitals and institutions – our national destiny. Transcorp Group is a key player in the power sector.  We recognise power is the single most critical factor in lifting our people out of poverty and enabling job creation.

Also Read: Transcorp Plc Records N14.2 Billion Gross Profit in Q1 2023

“Therefore, I am so proud today, that we have been able to bring together so many key stakeholders. We are fulfilling our promises to the Government and demonstrating Transcorp’s purpose of “Improving Lives and Transforming Africa.” He concluded.

David Olujinmi

David Olujinmi studies Engineering but his true passion is research and analysis. He writes about finance, particularly the capital market, investment banking, and asset management. More »

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