The United States-based firm, General Electric (GE) and Transnational Corporation of Nigeria Plc (Transcorp) have pledged to generate 650megawatts of electricity from the Ughelli Power Station within the next two years.
The promised came as the Bureau of Public Enterprises (BPE) Wednesday said it had transmitted an offer letter and the Share Purchase Agreement (SPA) in respect of ALSCON to BFI Group Corporation.
Speaking yesterday in Lagos during the signing of a framework agreement between GE and Transcorp to collaborate in addressing the infrastructural needs of Nigeria, former Director of the Department of Petroleum Resources (DPR), Mr. Tony Chukwueke said the plant would also hit a generating capacity of 450mw within one year.
Chukwueke and the Chairman of Transcorp, Mr. Tony Elumelu signed on behalf of the company.
The framework agreement, which was signed following a closed door meeting with GE's global chairman, Mr. Jeffrey Immelt, and Elumelu, will enable GE and Transcorp to explore a partnership for the refurbishment and expansion of the Ughelli power plant .
Commenting on the partnership agreement, Elumelu, said, "Heirs Holdings recently hosted the USAID Administrator Dr. Rajiv Shah in Lagos to discuss how the US Government can partner the Nigerian private sector to boost power generation in Nigeria. The agreement we have just signed with GE is a positive step toward the realisation of this goal.
"Power and transport are two major areas we know can turn economies and drive development. This is ultimately what we want to see happening in Nigeria," Elumelu added.
Also speaking on behalf of his company, Immelt confirmed GE's focus on Nigeria as a key market saying, "We chose to partner Transcorp because it is an African company with an investment philosophy that will drive change here and in the rest of Africa."
Immelt also noted that Nigeria is at a critical turning point in its development and its infrastructural needs are immediate and pressing.
President and Chief Executive Officer of GE West, East and Central Africa, Dr. Lazarus Angbazo, said his company believed that with the acquisition of Ughelli plant by Transcorp, the company has acquired the best asset of the Power Holding Company of Nigeria (PHCN).
Angbazo and Immelt signed on behalf of the company.
Angbazo noted that for Immelt to dedicate the early part of this year to come to Nigeria had demonstrated the prioritisation in his mind that Nigeria represented in the global General Electric.
"And for us, it is all about power. With the privatisation that has just taken place, I believe that Transcorp has acquired probably the best asset. This agreement allows us to bring the best assets with the very best company from the world to actually optimise what we have today, so that Nigeria will be better off because of this agreement," he said.
During the recent privatisation of the power sector, Transcorp, alongside its partners, offered $300 million to emerge the winner of the 360 megawatts Ughelli power plant.
Transcorp beat two other bidders, including Feniks Electricity and Amperion Power Distribution Limited, which offered bid prices of $54 million and $252 million respectively.
Meanwhile, the Supreme Court had in a judgment on the July 6, 2012 revoked the sale of the Aluminium Smelter Company of Nigeria (ALSCON), Ikot-Abasi by Rusal, a Russian company.
BPE's spokesman, Mr. Chukwumah Nwokoh, said in a statement that the action, which was in compliance with the apex court's judgment, also followed the directive of the National Council on Privatisation (NCP) which met at the Presidential Villa, Abuja on January 22, 2013.
The decision to hand over ALSCON to BFI came exactly eight years after the Federal Government refused to sell ALSCON to the company.
In December 2006, Rusal, the world's largest aluminium company, which belongs to Russian billionaire oligarch, Oleg Deripaska, acquired 77.5 per cent of the Federal Government's shares in ALSCON for $205 million.
Rusal later acquired another 7.5 per cent of the company from MAN Ferrostaal AG, the German firm that built the company.
However, the Russian company's acquisition of ALSCON was mired in controversy after it was discovered that the company did not win the bid during financial bid opening process.
Rather, the BFI Group, which was the preferred bidder, was side-tracked by former President Olusegun Obasanjo's administration in preference to Rusal, which was selected to acquire ALSCON.
BFI had rejected the Federal Government's decision and went to court to challenge the process.
Nwokoh confirmed yesterday that with the new development, BFI Group is expected to execute the SPA and pay the agreed 10 per cent of the offer price of $410 million, which is $41 million, within 15 days of the execution of the SPA.