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Geregu Power Plc, a top-performing power-generating company led by Nigerian billionaire Femi Otedola, has announced plans to significantly increase its power generation capacity to meet the growing energy demand in the country.
Over the next two years, the Otedola-led power-generating company aims to expand its operations and increase its total capacity from 435 megawatts to an impressive 1,300 megawatts, solidifying its position as one of the fastest-growing power companies in Africa.
The strategic move not only demonstrates the company’s commitment to meeting the energy needs of Nigerians, but also aims to boost its earnings and revenue through continued growth in the power sector.
Geregu Power has established itself as a formidable player in Nigeria’s energy generation sector, owning three natural gas-fired power plants with a combined capacity of 435 megawatts, which represents an impressive 10 percent of the country’s total energy generation capacity.
Recently, the Otedola-led company has been shortlisted for the acquisition of the highly coveted Geregu II power station, a 507-megawatt natural gas facility located in Kogi State, Nigeria, which would further enhance the company’s market position.
In line with the company’s strategic expansion plans, Akin Akinfenwa, CEO of Geregu Power Plc, has disclosed that the group aims to expand its capacity by an additional 900 MW in just two to three years.
“We want to run a combined circle operation on the basis of the existing plants to ramp up capacity to 1,300 MW. So we are looking at an expansion of 900 MW within a short period of two to three years,” Akinfenwa said.
The ambitious target demonstrates the company’s commitment to meeting the energy needs of Nigerians and solidifying its position as a leading player in the energy sector.
Institutional investors on high alert as Geregu Power set to expand capacity
Geregu Power’s impressive growth potential and expansion plans have attracted the attention of several institutional investors.
The Fund for Export Development in Africa (FEDA), the impact development arm of the African Export-Import Bank (Afreximbank), recently acquired a five-percent stake in the company, joining State Grid Shanghai Municipal Electric Power Company as an additional investor.
State Grid Shanghai Municipal Electric Power Company, the world’s largest power company, has held a five-percent minority stake in Geregu Power since 2012.
Akinfenwa attributes the company’s growing investor interest to its vision to become a leading power company in Africa, its strong adherence to world-class corporate governance and practices led by good leadership, and confidence in the Nigerian electricity supply industry as a key driver for structural transformation in African trade.
Femi Otedola’s Geregu Power becomes 8th most valuable company on Nigerian Exchange
Geregu Power has experienced a remarkable surge in its share price, rising by 118 percent from N149 ($0.323) at the start of the year to N325 ($0.7057), owing to increasing interest from both retail and institutional investors. This surge has elevated Geregu Power’s market capitalization to more than $1.7 billion, making it the eighth most valuable company on the Nigerian Exchange.
Despite a decline in revenue from N70.96 billion ($154.1 million) in 2021 to N47.62 billion ($103.4 million) due to setbacks and disruptions, Geregu Power’s innovative solutions, proactive risk management, and close collaboration with relevant authorities and stakeholders enabled the company to achieve a profit of N10.17 billion ($22 million) and maintain its competitive edge in the industry. Geregu will be paying its shareholders a dividend of N8 per share translating to a payout of N20 billion ($44 million), at the end of March.
The company’s financial performance in 2022 reflects its resilience, with total assets increasing from N114.82 billion ($250 million) to N174.03 billion ($378 million), and a significant rise in cash and cash equivalents from less than N4 billion ($8.7 million) to N51.63 billion ($112.1 million).
