SEPCO Pacific finally takes over Olorunsogo Power Station

The National Council on Privatisation (NCP) has formally handed over the Olorunsogo Power Plc to SEPCO Pacific Partners Limited.
The transition brings to 16, the total number of power assets handed over to the private sector in the last four months.
Vice-President NamadiSambo, who is also the chairman of NCP, noted at the handover ceremony that since the passage of Electric Power Sector Reform Act (EPSRA) 2005 and the unbundling of the defunct Power Holding Company of Nigeria (PHCN) into 18 successor companies, little was done to advance the reform of the sector until the coming into power of President Goodluck Jonathan which led to the enunciation of the Transformation Agenda of the nation’s economy.
The phase one of Olorunsogo Power Plant which has a capacity of 335 megawatts (MW) was constructed between 2002 and 2007 at the cost of $167,291,674.76.
The federal government funded 35% of the cost while the balance of 65% was financed through vendor financing provided by SEPCO at an interest rate of 6 percent per annum.
Meanwhile, Sambo, who was represented by the director-general, Bureau of Public Enterprises (BPE), Benjamin Dikki, said the reform and privatisation programme would not have been possible without the leadership, support and commitment of President Jonathan and his team in the NCP; presidential taskforce on power and presidential action committee on power to the implementation of the road map.
He noted that such capital injection and efficiency had been inadequate in PHCN over the years, resulting in gross inadequate power supply with the attendant negative effects on the citizenry and the economy at large, stressing that the provision of stable power remained imperative to drive the economic transformation of the country.
“It was the realisation that Nigeria will not attain the desired economic growth without adequate power that informed the power sector reform.”
He said the reform was a necessary tool for laying a solid foundation for sustainable power generation and service efficiency in the sector and the privatisation of the sector was a key component of the reform and a pre-condition for the start of a competitive electricity market in the country.
According to him, the participation of the private sector will bring about higher generation capacities through the provision of more efficient and cost effective power stations and improvements in electric power distribution in the areas of billing and collection, transmission networks.
The plant 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 would be 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 PHCN caused a default in the repayment plan.  This debt was finally taken over by the Debt Management Office (DMO).