Tony Elumelu presents case for Power Africa before US Senate

April 1, 2014
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, American government. We also felt it was important for the African private sector to step up to the plate and be part of the development effort on the continent, in a way that is consistent with our mission to create value for our shareholders.

Our Power Africa commitment was to invest up to $2.5 billion to generate 2,000 MW of electricity over five years, towards President Obama’s goal of doubling access to electricity in Africa over the same period. Heirs acquired the Ughelli power plant as part of the Nigerian government’s privatization of the power sector. When we took over the plant in November, it had never produced more than 160 megawatts (MW) of power. By January 1st, 2014, we had doubled its output to 348MW and project that we will be generating 725MW by the end of the year. We are also beginning a rehabilitation of the turbines in the plant and an expansion, to generate an additional 1,000MW at Ughelli.

I am pleased to report that we are on track to fulfill our commitment to Power Africa and we will be producing more than one‐third of the total current output in Nigeria which is 5,898 MW. And our power investments will not be limited to Nigeria. In 2015, we will begin to roll out our plans to generate power in other West and East African countries.

We are meeting these objectives, working with America partners. Symbion, a U.S. power company, led by my friend Paul Hinks who is also testifying today, is one of our investors in Ughelli. General Electric (GE), the world’s foremost leader in power technology provided us with technical expertise to help increase the output of the plant, and we’re in talks to work together on the Ughelli rehabilitation and expansion. Encouraging and supporting these types of partnerships between African and U.S. companies is one of the major contributions of Power Africa.

Ughelli currently directly provides employment for nearly 300 full‐time workers and 1,000 contractors, and this will grow to 700 employees and 2000 contractors with the expansion. We cannot yet estimate the number of jobs that will indirectly be created because new and existing businesses will have increased access to power.

Concerns around the exploitation of natural gas to expand electricity access in some African countries

There is some debate around how Africa ramps up its energy use and what resources it will utilize. Africa has tremendous energy potential, via both renewable and non‐renewable resources, and most countries have fully developed national plans and priorities around their existing energy resources. Many are interested in hydro, geothermal, solar and wind power, with the latter two of particular interest in providing off‐grid solutions for rural dwellers.

Additionally, natural gas is abundantly available in several African countries, to the tune of billions of cubic meters. Only 15% of Mozambique’s population has access to electricity, yet the country may possess up to 150 trillion cubic meters of natural gas. With 180 trillion cubic

meters of gas, Nigeria actually has more gas than oil. For the last 3 decades, companies have flared this gas, amounting to roughly 1.2 billion cubic feet daily in wasted energy, sending it into the atmosphere, harming the health of local populations and negatively impacting the environment. Today, along with hydropower, Nigeria’s national energy plan prioritizes the harnessing of its trillions of cubic meters of natural gas reserves, to help stabilize its current grid and increase energy access for our millions of citizens who still lack regular access to power.

Working within the national energy plan, Transcorp, a subsidiary of Heirs Holdings, made the strategic investment in the Ughelli gas plant, thereby helping to reduce gas flaring and carbon emissions. Transcorp also just concluded another round of Environmental and Social Impact Assessment (ESIA) for the plant, with an aim of ensuring that we manage the environment around our plant in a responsible manner. The earlier mentioned plans to rehabilitate our turbines will also help to reduce carbon emissions, while transforming the lives of our people.

Part 1 | Part 2 | Part 3 | Part 4

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