The $7 billion US-backed Power Africa initiative has received a major shot in the arm with the announcement that full financing has been completed for the $300 million Ughelli power plant in Delta State, Nigeria.
The project is being undertaken by Transcorp Plc, the publicly quoted conglomerate managed by Tony Elumelu’s Heirs Holdings, the pan-African proprietary investment company which is Transcorp’s largest shareholder.
Last month, Heirs Holdings committed $2.5bn toward the Power Africa Initiative, a multi-stakeholder partnership between the US government and seven sub-Saharan African countries, including Nigeria; and earlier this year, Transcorp signed a cooperation agreement with General Electric (GE) for the development of the power sector in Nigeria.
Transcorp Ughelli Power Limited (TUPL) announced last week a $225 million payment to Nigeria’s Bureau of Public Enterprise (BPE) representing the 75 per cent balance of the $300 million bid price for the 1000 megawatts capacity plant. TUPL made an initial deposit of $75m (25 per cent) for the plant in February this year.
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.
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).
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 fulfillment 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.”
The Power Africa Initiative led by the United States President, Barack Obama is a multi-stakeholder partnership between the US government and six (6) other sub-Saharan African countries, together with the African private sector. The shared objective of this initiative is accelerating investment in Africa’s power sector over the next five years.
Statement distributed by the African Press Organization on behalf of Heirs Holdings