Femi Otedola’s Geregu Power eyes growth as Nigeria finalizes $1.15-billion power plant sale

Omokolade Ajayi -

Key Points:

  • Geregu Power, led by Femi Otedola, is a frontrunner to acquire a government-sold power plant, boosting its generation capacity.
  • Geregu signed an MoU with Siemens to expand from 435MW to 1,200MW, including upgrades and new lower-emission plants (Geregu 3).
  • The expansion aims to improve efficiency and support the growth of Nigeria’s Electricity Supply Industry.

Geregu Power Plc, led by Nigerian billionaire Femi Otedola, is preparing to significantly expand its power generation capacity. The company is in line to acquire one of five power plants being sold by the Nigerian government through the Ministry of Power.

Nigeria sells power plants for $1.15 billion

The government has finalized the sale of these power plants, part of the National Integrated Power Projects, for approximately $1.15 billion. Geregu Power, under Otedola’s leadership, is among the companies vying for the plants.

The five power plants include the 434-megawatt Geregu II gas-fired plant in Kogi, the 451MW Omotosho II plant in Ondo, and the 750MW Olorunshogo II plant in Ogun State. Also included are the 563MW Odukpami plant in Calabar, Cross River State, and the 451MW Benin-Ihovbor plant in Edo State.

The Benin-Ihovbor plant, featuring five turbines, is priced at $420 million; the Calabar Odukpami plant, with five turbines, at about $260 million; and the Geregu plant, with four turbines, at $215 million. The Omotosho plant, with four turbines, is valued at about $85 million, and the Olorunsogo NIPP, with four turbines, at $170 million.

Geregu Power: A decade of electricity evolution

Founded in 2006, Geregu Power began supplying electricity to Nigeria’s national grid in 2007. A consortium led by Otedola’s Amperion Power Distribution Company Limited acquired the company in 2013. This 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. 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.

Last week, Geregu Power 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 435MW to 1,200MW.

Boosting Nigeria’s electricity sector

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.