BPE: Transcorp exceeded required capital investment in Ughelli power plant by N25bn

The Bureau of Public Enterprises (BPE) says Transcorp Power Limited exceeded the required capital investment in the Ughelli power plant by N25.25 billion. 

Alex Okoh, director-general of BPE, spoke on Monday before the commencement of the national council on privatisation (NPC) meeting on Monday. 

The BPE is saddled with the responsibility of privatising the nation’s electricity generation companies, including the Ughelli power plant.

In 2013, the defunct Power Holding Company of Nigeria (PHCN) was split into six generation and 11 distribution companies. 

Following the privatisation of the successor companies of the default PHCN, the consortium of Transcorp emerged as the preferred bidder and core investor in Ughelli power plant, thereby acquiring a 100 percent of the federal government equity.

TheCable had reported that the power plant has now been approved for delisting from routine monitoring.

The delisting came a month after the NPC approved the BPE recommendations and the fulfillment of five key post-acquisition requirements.

The requirements are available capacity, capital expenditure, human resources, health, safety and environment, and corporate social responsibility.

Speaking at the certificate presentation ceremony, Okoh said Transcorp Power invested N83.85 billion in the Ughelli power plant compared to the N58.6 billion envisaged — as required by the “covenant” for phases one and two of the post-acquisition plan.

“In pursuit of the objective of the federal government privatisation programme and in order to ensure an effective and efficient management of the privatised power utilities in the generation segment of the value chain, the BPE implemented a five-year monitoring exercise designed to determine the level of performance of the respective core investors and to access their levels of compliance with the operational thresholds and the covenant enshrined in the performance agreement,” he said.

The director-general said following a capacity determination and validation of “Ughelli Power Plc by the consultants engaged by the national council on privatisation, it was determined that generation capacity had increased by about 227 percent from the operational status of 300 megawatts at the point of handover in 2013”. 

“The company has achieved an available capacity of 680.8 megawatts, which surpasses the minimum performance target of 670 megawatts. Capital expenditure totaling N58.6 billion was the covenant established for phases one and two of the post-acquisition plan, while actual investments made by the current investor were in the sum of N83.85 billion,” he said. 

“All the agreed benchmarks under human resources, health, safety and environment and corporate social responsibility have also been achieved.

“Your excellency, having exceeded the minimum performance targets and having fulfilled all the agreed obligations, the national council on privatisation at its meeting on April 4, 2023, considered and approved the recommendations of the bureau and its requests that the company, Ughelli Power Plc to be approved for delisting from routine monitoring.”