Tinubu Greenlights Fundraising to Resurrect Ajaokuta Steel Plant

Minister Audu Collaborates with TCN in Ambitious Bid to Restore Ajaokuta Steel

by Oluwatosin Racheal Alabi

In a significant development, Shuaibu Audu, Nigeria’s Minister of Steel Development, has announced plans to meet with the Transmission Company of Nigeria (TCN) and other stakeholders to discuss the future of the Ajaokuta Steel Company Limited (ASCL). This follows TCN’s recent notice to suspend the steel company from the national grid due to an outstanding electricity bill of N33.71 billion.

Audu revealed this crucial information following a briefing with President Bola Tinubu, alongside Mohammed Badaru, the Minister of Defence, after their recent visit to China. The ministers had a fruitful discussion about the Ajaokuta plant’s outstanding electricity debt and strategies for its revival.

During a meeting with Sumaila Akaba, the Managing Director of Ajaokuta Steel, Audu enquired about the high electricity consumption at the plant, which is not operating at full capacity. He noted, “We’re trying to revive Ajaokuta in a collegiate system, in piecemeal, and so we may not have the capacity to pay all those outstanding amounts immediately.”

The Minister highlighted that a significant portion of the debt consists of interest payments to NBET (the Nigerian Bulk Electricity Trading), another government agency. He stressed the need for government agencies to work collaboratively towards reviving the Ajaokuta plant rather than creating obstacles.

Audu acknowledged that reviving the Ajaokuta plant, dormant for 45 years, is a gradual process requiring the support of all stakeholders, including TCN.

In a further boost to the plant’s revival, President Tinubu has approved the constitution of a committee comprising key stakeholders. This committee includes the Minister of Steel Development, the Minister of Finance and Coordinating Minister of the Economy, the Minister of Industry, Trade and Investment, and the Minister of Solid Minerals Development.

Furthermore, Audu revealed that the Lu’an Steel Holding Group, a major Chinese steel company, has committed to investing in a new steel plant in Nigeria. This investment is expected to create thousands of jobs and bring billions of dollars in foreign direct investments into Nigeria.

Regarding the Ajaokuta Steel Plant’s revival, Tinubu has approved local fundraising initiatives, estimated to cost between $2 to $5 million for the entire project. The light steel section of the mill alone will require about N35 billion for a restart. The Ministry has already received some offer letters from financial institutions, with the transactions expected to be completed in the coming weeks.

This ambitious move to revive the Ajaokuta Steel Plant is a significant step in Nigeria’s industrial development. The collaboration between the government and international partners, along with the strategic fundraising initiative, sets a new trajectory for the nation’s industrial sector, promising job creation and economic growth.

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