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Ashaka Cement signs N11bn agreement for 16MW coal power

By on July 27, 2016

Ashaka Cement Plc,  AshakaCem, has signed an N11 billion contract with a Chinese firm, RUNH Power Corporation Limited, for the construction of a 16-megawatt lignite-fired coal power plant in its factory in Gombe State. Speaking during the signing ceremony in Abuja, Chairman, Board of Directors, AshakaCem, Mr. Suleiman Yahyah, said the power plant, which is the first of its kind in the North East region of the country and second in Nigeria, would be completed in 2018.

He said the company would be financing the project from its N15 billion reserves and is a reflection of its commitment to the growth and development of the Nigerian economy. According to him, addressing power supply challenges is the first step in the development of the cement plant to recover cost leadership in the North East Region of Nigeria, hitherto ranked among the most energy costs in the Lafarge Holcim Group.

He said: “The North Eastern region is a strategic region where Ashaka is supporting the reconstruction programme of the government. This project will further strengthen the relationship with Gombe State as well as the communities and reinforce the importance of Ashaka as the major manufacturing company in that part of the country.”

He expressed confidence that the captive power plant would supply consistent energy to boost the plant’s operational efficiency, and which would help transform the company’s production capacity to one million metric tonnes per annum. To this end, Yahyah called on the Federal Government to declare the North East region of the country a tax-free zone for the next year, as this would help attract the much-needed investment in the region and also help in the reconstruction of the region. He added that in the near future, if the company is encouraged further, it would commence the expansion of its production plant which would boost its capacity to 2.5 million metric tonnes, while also undertaking the construction of additional power projects.

Also speaking, Managing Director of AshakaCem, Mr. Rabiu Umar, disclosed that the decision of the company to undertake the project was as a result of the challenges the country is having with power supply, and the project is part of its contribution to the growth of the country. He said the project, which is the second leg of its power project, will help the company to remain competitive and also bring about a reduction in its overall cost profile. Also speaking, the Project Director, Mr. Bruno Bayet, said the company, had since inception in 1974, been relying on power from the national grid and on generating sets running on diesel.

He described the construction of the power plant as a laudable initiative that will enable the company to significantly reduce its power costs and independence from the grid. He said: “The power plant, which will secure long term reliable power supply and improve the reliability of our production, will be operated by firing owned local coal mine reserves located in Maigana, 140 kilometers distance from the plant and will supply consistent energy to boost the plant’s operational efficiency.”

[Vanguard]