• Sunday, July 14, 2024
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BusinessDay

Ughelli plant output doubles as GE contracted for additional 1000MW

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Transnational Corp. of Nigeria Plc has doubled the output of its recently acquired Ughelli power plant, from levels they were at pre-privatisation.

“When we acquired the plant, only three turbines were working and they were generating 150 megawatts (MW),” said Tony Elumelu, chairman Board of Directors of Transcorp, at the AFC infrastructure summit, held in Lagos yesterday.

“Today, five turbines are working and on Monday we generated 338 MW, which represents a doubling of output,” Elumelu said.

Transcorp has contracted General Electric (GE) to increase the output at the plant – acquired at a cost of $300 million – to 1,000 MW, while a letter of credit (LC) was opened this week to that effect, according to Elumelu.

Elumelu and other stakeholders at the mmeting were optimistic that the power sector reforms have laid a foundation for the future growth of the sector and Nigeria.

“The companies that won the PHCH privatisation bids only took over the assets five months ago, so it will take some time to right the rot in the system that has happened for over 40 years,” Andrew Alli, AFC President and CEO, said.

power-plant

“There may be a few difficulties now but that does not indict the whole process,” Alli said.

The AFC which closed deals of $400 million in 2013 has 26 infrastructure related projects across Africa, including providing financing for the Azura IPP in Nigeria, according to Alli.

It plans to double the size of its balance sheet in two to three years, from its current $2 billion.

Africa’s infrastructure deficit as a whole is estimated at $93 billion per annum or 8 percent of the continent’s GDP. Nigeria, in a bid to improve her power infrastructure recently sold majority stakes in 18 companies unbundled from the former PHCN, comprising of six Generation Companies (GENCO’s), 11 Distribution Companies (DISCOs), and a Transmission Company (TCN).

“The growth rates in Nigeria can rise to 10 percent or more post privatisation,” said Jim O’ Neill, an economist and creator of the BRIC and MINT acronyms who was keynote speaker at the infrastructure summit.

Good governance was identified as an area Nigeria must improve on in order to continue to attract capital against the backdrop of a reduction of Quantitative Easing by the United States Federal Reserve.

It is estimated that Nigeria needs an annual investment of $3.5bn to achieve its generation capacity target of 40,000 megawatts (MW) by 2020.

“The supply of finance is potentially unlimited if governance can become better,” said O’Neill.

“It is necessary for Nigerian cabinet ministers to conduct themselves at higher standards and discipline.”

Ministers may send a positive signal by just being on time for scheduled meetings, without blaming their lateness on traffic, O’ Neill said. For some stakeholders, the governance issues are gradually getting sorted out.

“Governance is improving,” said Elumelu. “We took part in the power privatisation in Nigeria and were able to buy one of the biggest power plants in the country in an open and transparent process.”

PATRICK ATUANYA &  BALA AUGIE