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Sepco-Pacific to spend $25m on Olorunsogo power plant

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The Chairman, Sepco-Pacific Partners Limited, the new owners of the Olorunsogo Power Plant, Dr. Deji Adeleke, has said that the company will spend $25m on the maintenance and replacement of transformers at the plant.

Adeleke said this when the Senate Committee on Privatisation paid an oversight visit to the plant, according to a statement made available to our correspondent in Abuja on Monday by the Head, Public Communications, Bureau of Public Enterprises, Mr. Chigbo Anichebe.

The chairman said the company was well aware of the maintenance issue at the plant when it conducted due diligence on it as facilitated by the BPE.

According to him, the company inherited equipment at the plant that have not had any major overhaul maintenance in the seven years since the inauguration of the plant contrary to the recommendation of the manufacturers.

Adeleke said the company had embarked on an aggressive programme of a major overhaul of the plant based on medium to long-term plans.

To effectively carry out the programme, the chairman said his company had engaged a Chinese firm, Huafeng Electric Power Technology Engineering Company, as the operation and maintenance operators for the plant.

He pointed out that the sum of $25m had been earmarked for maintenance and replacement of transformers in the plant and that new transformers were being imported to replace the ones that were gutted by fire in September 2013 before Sepco-Pacific took over the plant.

He also expressed optimism that in the next three months, all eight turbines at the plant would work effectively and the plant would meet its generation capacity of 336 megawatts of electricity for transmission to the national grid.

The Chairman, Senate Committee on Privatisation, Senator Olugbenga Obadara, was quoted as saying that the lack of maintenance culture in public enterprises was one of the reasons for the privatisation of such public enterprises.

Obadara said when there was adequate availability of power; there would be appreciable growth and development of Small and Medium-scale Enterprises and the Nigerian economy.

The phase one of Olorunsogo plant, which has a capacity of 336MW, was constructed between 2002 and 2007 at the cost of $167.3m. The Federal Government funded 35 per cent of the cost, while the balance was funded through vendor financing provided by Sepco at an interest rate of six per cent.

It was conceived initially in the contract and terms of the agreement that the power project, after completion, would operate commercially and the proceeds from the sales of electricity used for the repayment of the vendor financing and interest payment.

However, the delay in the completion period coupled with limitation in gas supply and paucity of funds at the Power Holding Company of Nigeria resulted in default in the payment of the debt and accumulation of unpaid invoices to Sepco. The debt was finally taken over by the Debt Management Office.

Article Credit: Punchng

Updated 5 Years ago

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