FG hands over Afam power plant to Transcorp

The Federal Government has handed over the Afam Power Plant in the Oyigbo Local Government of Rivers State to Transcorp Power Consortium, which emerged the preferred bidder of the power asset, with a bid offer of N105.3bn.

This is coming as the Group Chairman of Transcorp Plc, Mr. Tony Elumelu, has said that access to electricity is central to Nigeria’s economic growth.

The handing over of the Afam Power Station followed the fulfilment of the requirement of the request for proposal (RfP) and approval granted by the National Council on Privatisation (NCP) after Transcorp had paid 25 per cent of the bid amount (N26.325 billion), a condition precedent to the handing over.

At the ceremony marking the final consummation of the transaction in Abuja yesterday, the Director General of the Bureau of Public Enterprises (BPE), Mr. Alex Okoh, said it was a significant milestone in the process of the privatisation of the last successor generation company of the defunct Power Holding Company of Nigeria (PHCN) and a culmination of several years of painstaking efforts by the National Council on Privatisation (NCP) and the BPE in the face of daunting challenges.

Okoh added that sequel to the previous failed attempts to privatise Afam Power Plc and the approval granted by NCP for the recommencement of a new process, the bureau had commenced a free, fair and transparent competitive process of the privatisation of Afam Power Plc and Afam Three Fast Power Limited, which culminated in Transcorp Power Consortium emerging as the preferred bidder with a combined offer of N105,300,000,000.

He stated that after negotiations, which were impacted, among others, by the COVID-19 pandemic, the federal government, through the BPE signed the Share Sale and Purchase Agreement (SSPA) with Transcorp Power Consortium on November 5, 2020.

He said, “In line with the requirements of the RfP and approval granted by the NCP, Transcorp Power Consortium paid 25 per cent (cash) of the bid amount today November 26, 2020, which was a condition precedent to the current activity of handing over.

“Distinguished guests, I must add that my emphasis on cash payment is to correct some misinformation in the media that purported that the Afam deal is a mere reconciliation of figures between the federal government and Transcorp. For the benefit of those who wish to know, this idea was never accepted by both the NCP and its several sub-committees.

“However, with the payment of the money by Transcorp to the treasury today, we hope this unfounded and concocted information being fed to the public would stop.”

He added that the challenges facing the electricity sector in Nigeria are enormous, and it was convincing that the opportunities are far greater and certainly worth exploiting.

He noted that the federal government has demonstrated commitment to create the enabling environment encourage private sector investors to take on these challenges and the opportunities therein to ensure quality and cost-effective service delivery to electricity consumers while also receiving adequate compensation.

While congratulating Transcorp Consortium for emerging the winner, he thanked other bidders for their faith in the process, the government and economy despite the trying times.

The challenge now, he stated, is for Transcorp Consortium to use its proven capacity and pedigree as demonstrated with Transcorp Ughelli Power Plant and Transcorp Hotel, Abuja to transform Afam Power into an exemplary utility company of reference.

Okoh, who gave a synopsis of the power sector privatisation journey, said change did not come easy, adding that the reform is necessary for laying a solid foundation for sustainable electricity supply, loss and cost-reduction as well as service efficiency in the sector other ventures.”

In his remarks, Elumelu said the event was an epoch, adding that access to electricity is central to economic growth.

Elumelu cited the contraction of the nation’s gross domestic product in the third quarter by 3.6 per cent as part of the pitfalls of a poor power base.

He noted that getting the power sector right is one of the elements needed to correct the negative economic trend.

Elumelu, assured the people that Transcorp Power Consortium will improve the nation’s power situation, create jobs and better the lot of its host communities.

He added that the confidence reposed in the company by the federal government would not be taken for granted.

He said Transcorp possesses the human and financial muscles to meet the expectations of the federal government and Nigerians.