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Here is Why Otedola is Listing N250 Billion Geregu Power Plant

Otedola listed Geregu to raise additional cash for expansion in the Nigerian energy sector

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Wondering why billionaire Femi Otedola listed Geregu Power? Here is a concise breakdown of what might have compelled the billionaire to run to the capital market after nine years of acquiring the Geregu Power plant via Amperion Power, a company he owns a 99.9% stake in.

In 2013, the year the billionaire first invested in the energy sector. Otedola dumped a total sum of $94 million on Geregu Power through Amperion.

In 2018, Otedola invested an additional $350 million in the sector, saying it was a sign of his commitment to the Federal Government’s plans of addressing the age-long challenges impeding the electrification of the nation.

The huge investment was the billionaire hint of what is to come as shortly after he announced the sale of Forte Oil to Abdulwasiu Sowami, the present owner of Forte. Otedola sold all his 75% stake in Forte Oil in 2019 and immediately announced a shift in his investment direction.

Earlier this year, Amperion Energy was selected by Federal Government to bid for the sales of Geregu II after reporting a reasonable success with Geregu Power in 2021 when the company declared a profit after tax of over N20 billion.

Otedola, who just invested a substantial amount in FBN Holdings Plc, needs to source for funds if he must expand his grip in the energy industry. The billionaire quickly divested N8 billion from his over 7% stake in FBN Holdings and went on to list the Geregu Power plant on the Nigerian Exchange Limited (NGX) at N250 billion to raise an additional fund for Geregu II bidding.

Geregu II Generation Company was put up for sale by the Federal Government amongst other power plants like Benin Generation Company Limited, Omotosho Generation Company Limited, Calabar Generation Company Limited, and Olorunsogo Generation Company Limited for acquisition in July 2022.

The Geregu II Generation Company has a capacity of 434MW. Therefore, by acquiring Geregu II Otedola’s total power-generating capacity would increase to 848MW given Geregu current capacity of 414MW.

Geregu Power Plc was incorporated in November 2006 as one of the unbundled companies from the non-existing Power Holding Company of Nigeria (PHCN).

The power plant began operations in 2007 with a total installed capacity of 414MW at commissioning. Therefore, given the seemingly unplanned method, in which Otedola jumped on FBN Holdings shares following the exit of Otudeko, the billionaire will need extra cash to expand his market share in the energy space. This listing explained how he plans to access or he is accessing that extra cash.

Calvados Global Services Limited, Otedola’s investment company used in acquiring most of his stake in FBN Holdings, owns 95% of Amperion Energy.

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Energy

AfDB Boosts Africa’s Renewable Energy With $20m

AfDB approved an equity investment of $20m in Evolution Fund III

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Board of Directors of African Development Bank Group (AfDB), on Thursday 17th of November, 2022, approved an equity investment of $20m in Evolution Fund III, a pan-African clean and sustainable energy private equity fund set aside in mobilising about $400m into renewable energy and resource-efficiency assets across sub-Saharan Africa over a 10-year period.

Inspired Evolution Investment Management, the fund manager has more than 15 years experience, with a track record of deploying more than $310m in renewable energy projects in African countries.

The fund manager, through its predecessor funds, has delivered 21 renewable energy projects with a total generation capacity of 2 GW.

The project, tagged “EVIII” aims to broaden geographic and technology scope to incorporate North Africa, and several SSA countries, as well as decentralise energy business models as the key climate mitigation and energy transition.

AfDB’s support is expected to contribute to an additional 2,162MW of installed renewable power generation capacity, 1.8m tons of CO2 emission savings, and a green and sustainable growth across Africa by creating 2,480 full-time jobs, consolidating on the track records of Evolution Funds I and II, which had generated around 1,309 jobs, boasting 22 per cent women engagement.

The Vice President, African Development Bank’s Power, Energy, Climate Change and Green Growth Complex, Kevin Kariuki, assured “The Bank is committed to boosting its portfolio of renewable energy projects and encouraging private investment in renewable and efficient energy solutions.”

Kariuki added that “The Evolution Fund III is well placed to invest much-needed capital in long-term, low-carbon and climate-resilient development pathways towards achieving a just, net-zero future for African countries.”

He revealed the bank’s investment in Evolution Fund III aligns with its ‘High Five objectives,’ particularly, ‘Light Up and Power Africa’ under its New Deal on Energy for the African continent.

The Director, Energy Financial Solutions, Policy & Regulations of AfDB, Wale Shonibare, admonished “The bank’s support for a private equity fund focused on promoting renewable energy in Africa, will assist regional member countries to achieve their Nationally determined contributions and Paris Agreement obligations.”

The continental bank strives to support renewable energy projects, as the African Development Bank acted as the Mandated Lead Arranger (MLA) and Coordinating Bank for the ZAR 11.6 bn total investment, with a commitment of ZAR 2.306 billion to the transaction in South Africa’s largest solar power project which began implementation in February 2022.

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Nigeria Owns Africa’s Largest Gas Reserves – NUPRC

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) disclosed that Nigeria owns Africa’s largest proven gas reserves of over 208 trillion cubic feet, with most of it untapped or flared.

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Gas Exports Drop as Shell Declares Force Majeure

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) disclosed that Nigeria owns Africa’s largest proven gas reserves of over 208 trillion cubic feet, with most of it untapped or flared.

In a bid to access the gas resources at the country’s disposal, the federal government declared 2021 – 2030 as the DECADE OF GAS, a period for the country to switch from an oil exploration country to a gas-focused industrial development.

The Chief Executive Officer of the NUPRC, Mr. Gbenga Komolafe, said monetizing gas resources is a positive move towards achieving energy security which is in accordance with the ongoing global energy transition.

According to Ed Ubong, the Managing Director of Shell Nigeria Gas Limited and President of the Nigeria Gas Association, Nigeria has more than enough gas and it needs to be brought to the surface, to be monetized and consumed.

Similarly, Mr. Timipre Sylvia, the Minister of State for Petroleum Resources, said that the growth of Nigeria’s gas reserves was important to achieving the “Decade of Gas Development”.

Sylvia stated that the government has its part to play in energizing the gas sector if Nigeria was to compete with the rest of the global economy.

The federal government, in an attempt to monetize Nigeria’s abundant gas reserve, signed a Memorandum of Understanding with Morocco to construct a 5,600KM gas pipeline that would diversify the economy and also generate additional revenue for the country.

The main motivation behind the gas utilization projects embarked on by the federal government is the government’s goal of wealth creation and economic diversification. Gas seems to be the future for Nigeria as natural gas will be the main energy source in the transition from fossil fuels to green energies.

Natural gas has the potential to not only develop Nigeria’s economy but also improve the standard of living of the country’s citizen.

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FG Reveals Zungeru Hydroelectric Power Project Ready, to Become Functional Q1 2023

The federal government has revealed that the newly constructed $1.2 billion Zungeru Hydro Electric Power project located in Niger state will become operational in the first (Q1) 2023 after its inauguration.

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The federal government has revealed that the newly constructed $1.2 billion Zungeru Hydro Electric Power project located in Niger state will become operational in the first (Q1) 2023 after its inauguration.

This was disclosed by the Minister of Power, Mr. Abubakar Aliyu, who inspected the extent of work done so far on the power plant.

According to the minister, each of the three turbines has already been installed and will be expected to generate 175 megawatts of electricity. He also noted that when the power plant becomes functional, it will generate 700 megawatts of electricity.

Commenting on the work done so far, the minister expressed satisfaction, stating that the contractors and workers have so far exhibited commitment. However, he stated that the project ought to have been functional already as the challenges of Covid-19 and insecurity hindered its early completion.

He further disclosed that the Zungeru Power Project is part of the federal government’s plans to improve electricity supply across Nigeria and to fulfill President Muhammadu Buhari’s commitment to vision 30:30:30.

Also commenting on the project is Secretary to the Government of Niger State (SSG), Ahmed Ibrahim Matane who accompanied the minister for inspection, said the state government has demonstrated “a high level of commitment to the implementation of the project because apart from electricity generation, it has abundant agricultural potential for the host communities to harness”.

Investors King understands that when the plant becomes functional, it will provide a huge respite both to the epileptic power sector and the struggling economy of the country.

Also, it is expected to provide direct and indirect employment opportunities to more than 2,000 people. 

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