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Lack of fund threatens operations of Afam power plant


Afam power plant. PHOTO:

The Managing Director of Afam Power Plant, Olumide Obademi, has said that the company is on the verge of collapse over lack of fund 57 years after its establishment.

Afam Power plant, located in Okoloma, Oyigbo Local Council of Rivers State was commissioned in five phases, Afam 1-5 with a total installed capacity of 987.2 megawatts.

Obademi, who spoke yesterday during the inspection of the facility by officials of the Federal Ministry of Power, Works and Housing, disclosed that Ministry of Power had refused to include the power plant in the budget since 2012 till date.

He said due to the development, only two machines, gas turbines 17 and 18 from Afam Four are presently operational, thereby pegging its production capacity to 110 megawatts.

“While the goal of the firm established in 1962 was to identify and overcome all obstacles and add an additional 600mw into the National Grid before 2028, the objective is currently under threat,” he said.

Obademi, who noted that the fund challenge faced by the company is so enormous as a result of the delay in concluding privitisation exercise and emerging market rules, said: “Because of privitisation exercise, there was no budgetary allocation to the company since 2012. The company was surviving through internally-generated revenues from energy generated until January 2015 when the evacuation transformer that serves GTs 17 and 18 that evacuates power got burnt. This left the company with no source of income.”

According to him, this made the company to go out of generation for more than two years from January 2015 to September 2017.

He, therefore, urged the Federal Government to continue funding the power plant by being included in the ministry’s budget since it has not been fully privatised.

However, in his response, the Minister of Power, Works and Housing, Babatunde Raji Fashola, represented by Director of Investment and Sector in the ministry, Mrs. Emontonghan Osaisai, said the funding of the plant had been captured in the ministry’s budget.

The minister said the challenge of budget deficit, which leads to rolling over of projects, also affected funding of the company.

Fashola said the $186 million Afam Fast power project would be ready for commissioning soon.

According to him, the project, which would add 240mw to the national grid, is expected to provide more jobs and increase the overall Gross Domestic Product (GDP) of the country.

He said more projects like that of Afam Fast Power would be carried out if the government is able to effectively expand the power distribution networks.

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