Key Points:
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- Nigerian power leader Geregu partners with Siemens Energy to expand capacity to 1,200MW, focusing on sustainability and efficiency.
- Partnership focuses on upgrading existing plant, combined cycle operations, and new lower-emission facilities.
- Femi Otedola’s leadership sees Geregu Power revenue soar, with Q1 2024 profits nearly quadrupling year-over-year.
Geregu Power Plc, a leading power generation company led by Nigerian billionaire Femi Otedola, has signed a Memorandum of Understanding (MOU) with Germany-based Siemens Energy to expand its power generation capacity. The deal aims to triple Geregu’s total capacity from 435 to 1,200 megawatts (MW).
Partnership for sustainable growth
The MoU, signed in Berlin on May 29, 2024, focuses on developing solutions for sustainable, resilient, and efficient power generation at Geregu’s existing plant. This collaboration will extend the lifespan of assets and support the growth of Nigeria’s Electricity Supply Industry (NESI).
Discussions during the signing ceremony included upgrading the Geregu 1 Power Plant from its current 435MW capacity to 500MW. Additionally, plans involve establishing combined cycle operations for an extra 200MW and constructing new facilities with lower-emission turbines (Geregu 3) to add another 500MW.
Femi Otedola’s vision transforms Geregu Power
Geregu Power Plc, founded in 2006, began supplying electricity to Nigeria’s national grid in 2007. Its 435-megawatt (MW) capacity power plant contributes to the nation’s energy needs. In 2013, a consortium led by Femi Otedola’s Amperion Power Distribution Company Limited acquired Geregu Power. The consortium included Calvados Global Services Limited and State Grid Shanghai Municipal Electric Power Company, the world’s largest utility.
Under Otedola’s leadership, Amperion invested $94 million in a 2014 plant overhaul, boosting capacity from 414MW to 435MW and achieving full utilization. Otedola’s firm progressively increased its stake in Geregu, reaching full ownership in 2021. Geregu Power became the first electricity generation company to list on the Nigerian Exchange in October 2022.
Geregu Power’s financial success
With Femi Otedola at the helm, Geregu Power achieved impressive financial milestones, with revenue surpassing $90 million in 2023. The company continued its success in the first quarter of 2024, with revenue soaring to N50.43 billion ($40.38 million), marking a 254.38 percentincrease year-over-year.
Revenue growth was robust across all streams, with total energy sales revenue surging from N9.08 billion ($7.2 million) to N31 billion ($24.82 million). Capacity charge revenue also rose from N5.15 billion ($4.13 million) to N19.43 billion ($15.6 million). Operating profit saw a substantial increase from N5.79 billion ($4.65 million) to N21.76 billion ($17.47 million), while profit nearly quadrupled to N14.46 billion ($11.6 million) compared to the same period in 2023.
Looking ahead
The recent deal with Siemens Energy positions Geregu Power for significant capacity expansion, aiming to reach 1,200MW within the next two years. The company’s financial strength and commitment to sustainable practices bode well for its future role in Nigeria’s power sector.