Heirs Holdings, owned by Tony Elumelu, chairman of the United Bank for Africa, plans to generate at least a quarter of Nigeria’s power consumption needs in the next five years
| By Maureen Chigbo | Sep. 22, 2014 @ 01:00 GMT |
HEIRS Holding Group believes that Nigeria’s power consumption needs can be adequately addressed in the next five years. For this reason, it has the ambition to generate at least a quarter of the country’s power consumption needs in the next five years. Heirs Holdings’ interests in the power sector include Transcorp Ughelli Power, a gas-fired, thermal power generating plant, which was acquired under the privatisation of Nigeria’s power sector.
Tony Elumelu, chairman of Heirs Holdings, who was also recently appointed chairman of the United Bank for Africa, said Thursday, September in Lagos, that “our experience so far at the Ughelli power plant is a testimony to the size of the opportunity; our amazing team has taken that plant from 150MW capacity when we took over in November 2013, to 450MW today; we expect it to increase to 700MW by October and to achieve 1000MW by the second quarter of 2015. At that rate, we’ll be contributing 20 per cent of Nigeria’s total power generation.” According to him, the Ughelli power plant was working on a greenfield project that will expand its capacity by an additional 1000MW in the next three to five years and it has signed a MOU with GE and Symbion Power to facilitate this.
“The power industry is a catalytic sector and the development of our country and our continent cannot happen without fixing it,” he said, describing, the USA’s Power Africa Initiative as “an amazing opportunity to democratise access to power for Africans. He added that “the $2.5 billion investment commitment we have made reflects exactly how excited I am about it. The present administration made a bold decision when it decided to affect the changes envisaged by the Power Sector Reform Act —a legislation that had been on the books since 2005. And that bold step was reinforced during President Barack Obama’s last visit to Africa. We felt more strongly than ever, the need to help power Africa.” The Heirs Holdings chairman listed three main challenges in the Nigerian power sector to include unreliable transmission infrastructure, access to uninterrupted gas supply and timely settlement of invoiced payments.
“In Nigeria, one of the biggest challenges to power generation is transmission and in fact, while Ughelli Power Plant generated at full capacity for the first time in July, we’ve been asked to scale down generation because of the outdated transmission systems; for every 100MW generated and sent to transmission companies, 40 per cent is lost, in part because of this infrastructure issue,” Elumelu said
While regulation is not a key challenge, says the Heirs Holdings chairman, it is an issue within the sector that if addressed, has the potential to speed sector growth exponentially. “We need a pragmatic regulation that recognises that within Nigeria, the sector is nascent and so policies must be designed to encourage growth. In fairness, the federal government is confronting these challenges head on.”