FG, TRANS-AFAM SIGN 20-YEAR POWER PURCHASE DEAL
The Federal Government has signed a 20-year Power Purchase Agreement with Trans-Afam Power Limited, a subsidiary of Transcorp Power, to ramp up the 726 megawatts capacity of the Trans-Afam Power Plant in Rivers State.
Parties in the deal signed the PPA on Thursday at the Abuja headquarters of the Federal Ministry of Finance, Budget and National Planning, in the presence of the Minister of Finance, Zainab Ahmed.
The Managing Director, Nigerian Bulk Electricity Trading Plc, Nnaemeka Ewelukwa signed on behalf of the Federal Government, while the Chairman, Trans-Afam Power Limited, Stanley Lawson, signed for his company, and stated that the firm would invest £150m on the plant.
Speaking at the event, the finance minister said the Federal Government was optimistic that Transcorp would ramp up the capacity of the power plant, in order to boost the country’s electricity generation.
“Thank you to Trans-Afam Power for really coming out and showing your interest in this power project that has a maximum capacity of 726MW. Transcorp has been one of the most significant players in the generation arm of the power sector,” Ahmed stated.
Ahmed assured her guests of the continuous support of the Federal Government during the course of their investments and in managing the projects.
On his part, NBET’s managing director said one of the roles of the agency in the sector was to incentivise investments in power generation, as well as provide assurance of power off-take from privatised power plants.
Ewelukwa said the winning bidder of Trans-Afam Power had already demonstrated capacity in Transcorp Ughelli Power Plant, adding that NBET was optimistic that the firm would ramp up the output of the power plant that it just signed the PPA for.
The Chairman, Trans-Afam Power Limited, Stanley Lawson, said he was delighted that “we are finally able to complete this process, which is the signing of the PPA for power generation in Nigeria.”
He stressed that the importance of Power Purchase Agreements in the life of power plants could not be over-emphasised, as it was a very critical component of power plants, adding that the firm would invest €150m on the plant.
“With this PPA, Afam power will be better positioned to continue towards capacity recovery, as well as incremental generation of electricity. Till date, we have spent well over €50m on the plant, and we plan to spend another €150m in the near future,” Lawson stated.
The Managing Director, Trans-Afam Power Limited, Vincent Ozoude, explained that the commercial viability of every electricity generation company was on its PPA.
“So with this agreement that we have signed today, it give us full assurance that whatever power we put on the grid will be paid for. When you have a PPA, it kind of governs how you operate in the sector, how your generate power and how you get paid.
“So there’s no ambiguity of terms and conditions for your commercial entitlements. And it enables us as a generation company to invest more, for as we do more capacity recovery we get the assurance of payments,” he stated.