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Shell regrets underutilization of Afam IV power plant, $200m debt

Had it been that Shell Petroleum Development Company (SPDC) did not subsidize the cost of Afam IV Power Plant in River State, the impact of the $200 million debt would have forced the company to walk away.

This was the revelation of the General Manager of the plant, Dr. Philip Mshelbila, while receiving the renewed operational license of the plant from the Nigerian Electricity Regulatory Commission (NERC) in Abuja.

He said the reason the plant has still been in operation despite the debt profile and underutilization, is because the company has subsidize its cost.

According to him, “It is a rather unfortunate situation where within our years of operation we are trying to cope with over $200million debt. And in spite that this power plant has still been in operation.

“It is simply operated and subsidized by SPDC. That is the only reason we are still in this business and gas is available. We would have walked away a long time from it.”

Continuing, he revealed that despite the vantage position the integrated 650MW plant that also has clean energy has always been underutilized.”

“The underutilization of the plant, according to him, is as a result of low repatriation of power by the plant’s off-taker and the Electricity Distribution Companies (DisCos).

Mshelbila further averred that “It is still the most efficient and it is available. So if you need a lot of downstream aspect of transmission and distribution and so on, this plant can contribute as high as 15% of the nation’s power.”

The Afam VI plant has delivered over 24.16 million Megawatt-hour (MWh) of electricity into the national grid between inception in 2008 and 2016.

Afam VI is owned by the Shell Petroleum Development Company Joint Venture (SPDC JV), and located in Okoloma, Oyigbo Local Government Area of Rivers State.

Additional discoveries showed that the operations at Afam VI have generated subcontract opportunities and employment for over 150 staff from the 16 host communities. It also provided hands-on and offshore training for 15 youths in Electrical, Mechanical and Instrumentation engineering on Combined Cycle Power Plant operations and maintenance. All the trainees are already employed in the Nigerian power industry. Arrangements have been concluded for the training of another 15 community youths.

The power plant also won SPDC the Best Company in Climate Action Award in the 2016 edition of Sustainability, Enterprise, Responsibility Awards for Corporate Social Responsibility (SERAs–CSR), an annual event to celebrate organisations that invest resources to improve the socioeconomic living conditions of people in Nigeria and Africa.