In order to fulfill Nigeria’s expanding energy needs, according to Vice President Yemi Osinbajo, the country’s power sector needs considerable private sector investment.
When giving the discharge certificate to Mr. Tony Elumelu, Chairman of Transcorp Ughelli Power Limited, the main investor in the Ughelli Power Plant, Osinbajo made the observation.
The release comes one month after the National Council on Privatization approved the Bureau of Public Enterprise’s recommendations that Ughelli Power Plc be delisted from routine monitoring because it had met five key post-acquisition requirements, including available capacity, capital expenditure, human resources, health, safety, and environmental responsibility.
The Ughelli Power Plant, which had been operational since 1966 and had an installed capacity of 972 MW before its capacity was reduced to 300 MW, was acquired by the Transnational Corporation of Nigeria Plc in 2013 through the company’s power subsidiary, Transcorp Ughelli Power Limited.
According to BPE Director-General Alex Okoh, the facility has undergone post-acquisition monitoring and review since the Bureau of Public Enterprise acquired it ten years ago.
The VP speaking at the State House, Abuja, said, “The power needs of our country are grave. And we strongly believe that the right approach is the privatisation of the power sector to enable serious-minded private sector players to invest in the provision of public power and ensure that they are efficient while they make a profit at the same time.”
He called on other private sector players to follow suit, saying, “We hope that this will not be the last in the series of private power companies that are taking over power plants that are unable to meet the expectations of the post-evaluation plans.”
The vice president added that a crucial component of the BPE’s post-acquisition plan was the routine evaluation and monitoring of the power-generating company.
Osinbajo added that “It has covenants and deliverables which the enterprise is supposed to live up to. And we found, in this case, that Transcorp Power PLC has done exactly that. We have been able to ensure compliance with all of the deliverables and, in some cases, even exceeding the covenanted deliverables in the PAP,”
He applauded Transcorp Power’s management and urged the organization to “continue in that path and to do even better.”
The DG BPE indicated that the discharge certificate was required because an assessment revealed that UPP’s generation capacity under Trancorp Power increased by 227% in ten years.
He continued by saying “Following a capacity determination and validation of Ughelli Power PLC by the consultants engaged by the National Council on Privatisation, it was determined that generation capacity had increased by about 227 per cent from the operational status of 300 megawatts at the point of handover in 2013.
“The company has achieved an available capacity of 680.8 megawatts, which surpasses the minimum performance target of 670 megawatts. Capital expenditure totalling N58.6bn was the covenant established for phases one and two of the post-acquisition plan, while actual investments made by the current investor were in the sum of N83.85bn. All the agreed benchmarks on human resources, health, safety and environment and corporate social responsibility have also been achieved.
“Your Excellency, having exceeded the minimum performance targets and having fulfilled all the agreed obligations, the National Council on Privatisation at its meeting on April 4, 2023, considered and approved the recommendations of the Bureau and its requests that the company, Ughelli Power PLC be approved for delisting from routine monitoring.”
According to Mr. Elumelu, the company’s indigenization strategy has made sure that only Nigerians are managing and operating the Power Plant.
“Mr Vice President, let me also say that in addition to the criteria set, we actually are doing a very strong indigenisation of Transcorp Power Plc. I’m proud to say that our power plant is managed and operated 100 per cent by Nigerians.
“We at Transcorp Group recognise the importance of improved access to electricity. We know that with improved access to electricity, people can go to school, hospitals can function well, businesses can operate very well and most importantly can empower the industrialisation of our country.
“This is why we invested in power and continue to invest in the power sector because we know it holds the key largely to the success of our country,” he said.
