Transcorp completes acquisition of Afam Power plant

Transcorp has completed the acquisition of “Afam Power Plc” and “Afam Three Fast Power”, in a deal the Federal Government says is a milestone in accelerating power sector reforms.

Yemi Osinbajo, Nigeria’s vice president and chairman of the National Council on Privitisation, in an address at the signing ceremony of the Share Sale and Purchase Agreements for the Privitisation of Afam Power Plc. and Afam Three Fast Power Limited on Thursday, said the investment is first of many new investments planned in the sector across the value chain from generation to distribution.

Osinbajo said that the Buhari Administration has a goal to eliminate challenges in the Power Sector by improving liquidity in the market through a host of measures, including the recently announced National Mass Metering Program and the transition to Service-Based Tariff.

“We need a power sector that can provide quality service to Nigerian consumers and sustain itself.

The “Afam Power Plc.” and “Afam Three Fast Power Limited” plants have a combined capacity of almost 1,000MW. The current usable (operational) capacity of 240MW from Afam III and about 100MW from Afam Plc speak to the opportunity that the Transcorp acquisition can bring, the vice president said.

Recall that last year, the National Council on Privatisation approved Transcorp Consortium as the Preferred Bidder for the 100% acquisition of Afam GENCO (Afam Power Plc and Afam Three Fast Power Limited) with a bid price of N105.3bn.

“We expect that under Transcorp’s ownership the operational capacity of the facility will be raised to its full capacity.

“We have seen the progress that Transcorp has made with the Ughelli Power Plant in raising the operational capacity significantly (since it acquired the plant in 2013) and we expect nothing less from the Afam acquisitions,” Osinbajo said.

The Afam cluster houses multiple power plants outside of those being acquired by Transcorp (including those owned by Shell Petroleum Development Company and Sahara Energy) and is an energy hub for the country.

“We have no doubt that the addition of Transcorp to the community will come with the forward-thinking Corporate Social Responsibility initiatives that Tony and his team are known for.

Afam GENCO has a total installed capacity of almost 1000 megawatts generated from a natural gas-powered plant in Rivers State. With this new acquisition, the company’s combined installed generation capacity will go up to almost 2,000 megawatts in line with its short and medium-term strategy objectives.

Nigeria privatised the power sector in 2013 to attract investments needed to revamp electricity generation and distribution. Over the years, companies including Transcorp have invested more than US$3 billion for controlling interests in 15 power generators and distributors.