Power Generation As The Investors’ Nightmare

By Adeyinka Giwa

The four-unit Gas powered Electricity generating Egbin Power Plant in June 2012 was in a state of disrepair and neglect, and lacking in overhaul maintenance for decades. The plant managed to epileptically produce a paltry 400 Megawatts of its installed capacity of 1,320 Megawatts, at its best performance. Fast forward to May 2016. The units in the new vibrant Egbin Power Plant are overhauled and upgraded producing, when gas is sufficiently available, at its full production capacity of 1,320 Megawatts. The workers appear ready to drive this project to the next level: The investor’s plan to double the plant’s production in the first five years of taking over.

Since November 2013 when Sahara Power, a subsidiary of Sahara Group bought 70 per cent stake in Egbin Thermal power plant, the vast complex has come back to life and the plant, after a comprehensive overhaul which cost the new investors some $388 million, has resumed production, at full capacity barring no disruption to gas supply.

With the 1, 320 MW of electricity, Egbin currently produces one quarter of Nigeria’s total power capacity. Today, new facilities and structures have been put in place by Sahara Power, in collaboration with their technical partners, Korea Electric Power Corporation (KEPCO). Egbin now boasts of skilled manpower, world class professionals and in general, a well-motivated workforce. That is why Kola Adesina, chairman, Egbin Power Plc. can beat his chest and assert that “since we acquired the assets, our passion has been to embark on constant upgrades in technology and investment in human capital to ensure we light up Nigeria.”

But beneath the giant strides so far achieved by the Egbin Power Station, lies a huge challenge. The power station currently suffers shortage of natural gas. The situation is worsened by renewed militancy in the creeks of the Niger Delta region, where oil and gas pipelines are being blown up on regular basis. This is a more compelling reason why the Federal Government must get its acts right in ensuring that peace returns to the region.

The company is at present grappling with economic woes occasioned by difficulties in accessing foreign exchange. At the time of the acquisition of the assets by the new investors, the exchange rate was N198 to the dollar. Having raised capital from banks, the investors are now faced with the harsh reality of paying back in time of economic down turn. Indeed, as a result of the harsh economic situation, liquidity problem has also set in, making it increasingly difficult for the company to finance its capital intensive operations.