- Egbin Expansion: Investors Shop for $1.2b
Owners of Egbin Power Plc are looking for about $1.2 billion to expand the power plant by additional 1,500 megawatts (Mw) by 2020, it was learnt.
The company’s Managing Director and Chief Executive Officer, Dallas Peavey, said on the sidelines of the visit of a delegation of the United States (U.S) congressmen led by Senator Chris Coons to the company that the management has started moves to achieve the expansion of the plant. He said the environmental impact assessment (EIA) and engineering design, among others, had been completed.
He said the management was exploring all partnerships with the United States government, World Bank, International Finance Corporation (IFC), Transmission Company of Nigeria (TCN), among others, to ensure that power was available to Nigeria.
He said: “On the visit of the congressmen, we are working together with stakeholders and partners looking for a better future, how to do things better and especially Nigeria needs power and we need to make it available.
“Since we took over Egbin in November 2013, we have improved efficiency more than it was and increased it to installed capacity of 1320Mw. We are working with the government to ensure evacuation of generated power. Currently, we have 700Mw stranded power that Nigerians need. We are working the TCN, U.S, World Bank, IFC and the Sahara Group to get the power out.
“However, the challenge is that the plant is 35 years old and the cost of replacement of its parts requires a long lead term. This plant was built by Marubeni Consortium, which used Hitachi Company of Japan for the Electric/Mechanical. Therefore, to do the changes, you have to bring the company down here. But we are looking at the U.S. to find some parts to reengineer the system operate and improve it and make it work. We are working with the U.S government and other stakeholders to make it work.”
On gas supply challenge, the Egbin chief said gas is not an issue today. We have more than sufficient gas supplies to be able to generate power. The issue is evacuation of power and that is why we are working with the TCN, he added.
On returns on investment, Peavey said: “We have spent over $400 million on the plant and $120 million on repairs only but currently we are not focused on making returns. The strategy was not to make money immediately. The money was spent to develop the nation. It was not invested with expectation to make returns on investment immediately. The Power Purchase Agreement (PPA) with government is for 20 years. We still have 16 and half years more.
“In the last six months, you noticed that the power sector doesn’t have blackout/system collapse as before. This is because we are working better with the distribution companies (DisCos), the transmission and gas companies so that we can generate and they can take it and do what it is needed for so that customers get what they pay for.”