Ajaokuta debt: Minister, TCN to meet as Tinubu approves fundraising to revive plant

Shuaibu Audu, minister of steel development, says he will meet with the Transmission Company of Nigeria (TCN) and other stakeholders on the planned disconnection of the Ajaokuta Steel Company Limited (ASCL) from the national grid.

On Wednesday, TCN issued a 14-day suspension notice to the steel company for nonpayment of N33.71 billion èlectricity bill.

The minister spoke to state house correspondents after he and Mohammed Badaru, minister of defence, briefed President Bola Tinubu on their recent trip to China.

Speaking on why the plant owes such electricity debt, Audu said investigation was ongoing, saying he asked Sumaila Akaba, managing director of Ajaokuta Steel, during a meeting, “why consumption of so much electricity in a place that is not operating at full capacity”.

“Part of what we also need to do is that we’re trying to revive Ajaokuta in a collegiate system, in piecemeal, and so we may not have the capacity to be able to pay all those outstanding amounts immediately,” he said.

“Part of what the MD of Ajaokuta told me is that most of the money is in interest payments, and NBET (the Nigerian Bulk Electricity Trading), the electricity company, that has disconnected it, is also a government agency.

“If we, as a government agency, are trying to revive Ajaokuta and working hard to do that, we should not have another hand within the same government making things very difficult for us.

“And so part of what we plan to do is to sit down on the table in the next few days as quickly as possible to be able to come up with a plan so that they can put it back on the grid and put things back in order.

However, the minister said it is a gradual process and Ajaokuta cannot be revived overnight.

“This is a plant that has not been working for 45 years, it is a difficult task to try and get it back on track,” the minister said.

Therefore, he called for the support of stakeholders, and entire government agencies — including TCN — to get the project back on track, to create job opportunities for Nigerians.

‘TINUBU SETS UP COMMITTEE TO REVIVE AJAOKUTA STEEL PLANT’

Speaking further, Audu said the president has approved the constitution of a committee comprising key stakeholders to revive the moribund Ajaokuta steel plant.

The committee, he said, comprise the minister of steel development; minister of finance and coordinating minister of the economy; minister of industry, trade and investment; as well as minister of solid minerals development.

Also, he said Lu’an Steel Holding Group, a Chinese steel group, has committed to investing in a new plant in Nigeria, while an Indian steel group plans to send an advanced team to the country for collaboration.

“We were in China on the 1st of January 2024, we were there till the 8th of January. And met with the Lu’an Steel Holding Group, which is one of the largest steel companies in China, is the top 20 steel companies in China. They produce about 20 million metric tons of steel per annum,” he said

“We had very meaningful discussions with them, and they agreed and made a commitment to set up a new steel plant in Nigeria, where thousands of jobs would be created, and they would invest billions of dollars in foreign direct investments into Nigeria.

“In that same regard as well, basically, our discussions with Lu’an Steel Holding Group, they mentioned that they would send an advanced team to Nigeria after the Chinese New Year, sometime in end of February 2024.

“And we briefed Mr. President that when the team is on ground, we would like to also give them audience with Mr. President, which he approved. Mr President was very happy with the development.”

Meanwhile, Audu said Tinubu has approved local fundraising initiatives for the Ajaokuta steel plant, saying reviving the plant will cost about $5 million.

“Mr President gave approval for us to raise money locally. The first phase of the project for Ajaokuta Steel Plant, to revive the entire steel plant will cost somewhere between $2 to $5 million and however, to restart the light steel section of the mill is going to cost us about N35 billion,” he said.

“So we’re going to the market to show proof of consent to raise this money from local financial institutions to be able to restart that.”

He said the ministry has received some offer letters from some financial institutions, adding that the transactions will be completed in a few weeks to be able to commence the project.