President Barack Obama’s $7 billion US-backed Power Africa initiative has received a major boost with the announcement of the complete payment for the $300 million Ughelli power plant in Delta State, Nigeria by Transcorp Plc, the publicly quoted conglomerate managed by Tony Elumelu’s Heirs Holdings.
Transcorp Ughelli Power Limited (TUPL) which made an initial deposit of $75 million (25 per cent) for the plant, announced last week a $225 million balance payment to Nigeria’s Bureau of Public Enterprise (BPE) for the 1000 megawatts capacity plant.
TUPL, which has American company Symbion Power as an equity investor in the project, plans to increase the power generation of the plant from 300MW to over 1070MW over the next five years.
Commenting on the completion of their acquisition, Elumelu, the Chairman of Heirs Holdings and of Transcorp said: ‘It is a major stride forward and has significance for Nigeria, the region and Obama’s administration, as it represents positive progress in the fulfilment of Power Africa. We are committed to developing Nigeria’s power sector efficiently to meet the increasing demands of our fast-growing economy and improve the living standards of all Nigerians.”
United Bank for Africa Plc (UBA) and the Africa Finance Corporation (AFC) as co-arrangers, and First City Monument Bank Plc (FCMB) and Fidelity Bank as co-financiers provided the debt financing facility for the acquisition of the plant, which is one of the six power generation companies unbundled as part of the privatization of the Power Holding Company of Nigeria (PHCN).
Last month, Heirs Holdings committed $2.5 billion toward the Power Africa Initiative, a multi-stakeholder partnership between the US government and seven sub-Saharan African countries, including Nigeria; with the purpose of accelerating investment in Africa’s power sector over the next five years.
Source: Venture Africa