Full financing for the $300m Ughelli gas-fired thermal power plant in Delta State, Nigeria, has been completed by the Transnational Corporation of Nigeria, a Nigeria-based business conglomerate, as part of a wider US-led scheme worth $7bn to expand energy access across sub-Saharan Africa. In late August 2013, Heirs Holdings, the investment arm of the Transnational Corporation of Nigeria, announced its move to partner with the Africa Finance Corporation (AFC), a Nigerian multilateral finance institution, and a selected group of Nigerian banks to provide $225m to finance the Ughelli power plant. Once operational, the power plant is expected to become one of Nigeria’s largest generators of power, and sources close to the deal estimate that it could generate 1000 megawatts of energy.

This move is part of a wider commitment, worth $2.5bn, to the Power Africa Initiative, a US-led government initiative that seeks to bridge the gap between Africa’s power deficit and its economic potential. The initiative, which is a multi-stakeholder partnership between the governments of the US, Tanzania, Kenya, Ethiopia, Ghana, Nigeria and Liberia, as well as public and private sector partners including the African  Development Bank, is seen as an essential step forward in the fight to end energy poverty.

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“[This] is a major stride forward and has significance for Nigeria, the region and [president Barack] Obama’s administration, as it represents a positive progress in the fulfilment of Power Africa,” Tony Emelu, the chairman of Transnational Corporation of Nigeria, said in an official statement. “We are committed to developing Nigeria’s power sector efficiently to meet the increasing demands of our fast-growing economy and improve the living standards of all Nigerians.”

With nearly two-thirds of sub-Saharan Africa’s urban population lacking access to reliable power facilities, and more than 85% of its rural inhabitants subsisting on little or no access to electricity, the Ughelli power plant is seen as the first critical step to boosting the continent’s productivity through fulfilling basic energy needs.

“The growth of the Nigerian economy cannot be fully realised without an efficient and functioning power sector,” Andrew Alli, the CEO of the AFC, said in an online statement. “AFC’s investment in the Ughelli power plant will contribute towards reducing Nigeria’s chronic power deficit, foster economic growth and create employment. Power is one of the AFC’s high priority sectors for investment, and arguably Africa’s most significant need. To this end, AFC has partnered with the US government through USAID, to accelerate investment in Africa’s power sector over the next five years and increase access to clean, geothermal, hydro, wind and solar energy.”