Sparkle Energy to build $10 billion 4000 Gas-fired Power Plant

Federal government’s bid to ensure regular power supply has received a boost as Sparkle Energy has said it planned  to build a $10 billion 4000 Gas-fired Power Plant called Sparkle Power Plant, which is to become the largest gas-fired power plant in Nigeria.
Making the disclosure in a document made available to THISDAY, Groot Property Group Ltd said it floated the firm (Sparkle Energy) in partnership with some prominent Nigerian entrepreneurs and scholars based in the United States,  and a Nigerian consortium for the development of the power project. The company said the project, with a construction budget of $10 billion was designed to sufficiently power up to 5 million homes in Nigeria.

Nigeria, with a population of about 155 million produces more than 22 billion of KWh and consumes more than 20 billion KWh, with a surplus of about 2 billion KWh of electricity, the company said.

The Chief Executive Officer of Sparkle Energy, Julius Gbayange, said:  “Every well-meaning Nigerian understands the importance of clean, safe and constant power supply. This is the core of the development of our nation’s economy because it addresses the question of industrialisation and the current high rate of unemployment. And we are glad that under this oriented Groot Property Group’s technical mentorship and planning management, this power project is going to help rid Nigeria this illness. This is a new dawn for Nigeria.”
The consortium also seeks to form a partnership with the federal government of Nigeria for the development and realisation of Sparkle Power Plant.

“Obviously, Groot Property Group (Pty) Ltd will only hold 15percent stake in Sparkle Energy Ltd, while the Nigerian consortium will hold 37percent and 25percent stake is reserved for the Nigerian Central Government, while the difference of 23percent will be reserved for our future investors and partners. So, this is a development project by the Nigerians for the Nigerians and for the Government of Nigeria”, Chief Economist and VP Development Operations of Groot Property Group (Pty) Ltd, Simon Kapenda  said.

“By 2016, Nigeria will become Africa’s largest economy surpassing South Africa. However, Nigeria’s industrial development lags far behind of South Africa, due to the country’s infrastructure maintenance and management. And until Nigeria fixes some of these issues, South Africa will always be the leading and powerful economy in Africa due to its massive industrialisation and well-maintained infrastructure”, he added.

Sparkle Energy Ltd also seeks to help repair and fix the current electricity infrastructure in Nigeria. The company said preliminary research revealed that in Nigeria, there might be certain people who constantly sabotage purposely the country’s electricity power lines in order to help increase the sale of personal electricity generators in the country.

Said Kapenda:  “There are currently laws in place against the sabotaging of power lines by anyone but these laws have little or are not entirely enforced. What we hope to do is to ask the Central Government to look into this senseless act of vandalism, which is only pushing down the vast development of our country’s economy.”

Under the agreement, the government is expected to finance the start-up costs for the predevelopment of Sparkle Power Plant, which is $50 million. Then, with the guarantee of the government and Offtake Agreements in place, the company said it expected to raise the needed $10 billion to fund the project through a combination of debt and equity through a network of Development Finance Institutions (DFIs) with a mandate to fund projects in developing countries.

The DFIs include DFIs include Industrial Development Corporation of South Africa Limited, Development Bank of Southern Africa Limited, IFC and African Development Bank, as well as certain export credit agencies like the Export Credit Insurance Corporation of South Africa (Pty) Ltd (ECIC) and export facilitation banks like the Export-Import Bank of China and other commercial banks.

The preliminary development for Sparkle Power Plant is expected to be completed by mid-December 2011. Thereafter, the company expects to select the EPCM Contractor for the engineering, procurement and construction management (EPCM) of Sparkle Power Plant. The technical, engineering and construction is expected to start in mid 2012 and to make Sparkle Power Plant ready for commercial operation by the end of 2016.

Thisday