Transnational Corporation of Nigeria (Transcorp) and General Electric (GE) have signed an agreement to expand the Ughelli power plant's capacity by 1,000MW over the next three to five years.
In addition to this, the companies have also signed an agreement for the rehabilitation of the damaged GT 15 turbine at the plant that will add 115MW to the output.
Located in Delta State, the plant, which is claimed to be Nigeria's largest gas-fired electricity generation asset, currently has 360MW of capacity, up from 160MW, when it was acquired by Transcorp.
In November 2013, Transcorp Ughelli Power, a subsidiary of Transcorp, had acquired 100% ownership of Ughelli Power, the owner and operations of the plant, for around $300m under the 2013 power privatisation programme.
The investment is part of the $2.5bn Power Africa Initiative, a new initiative to double access to power in sub-Saharan Africa.
The project calls for the construction of a powerhouse, a substation, gas storage tanks and related infrastructure, the installation of turbines, transformers and generators and the laying of transmission lines.
The additional 115MW and the capacity being enhanced from rehabilitation works will increase the plant's total output to 700MW by December 2014.
In August 2013, Heirs Holdings, the investment arm of Transcorp, had partnered with the Africa Finance Corporation and a group of Nigerian banks to provide $225m to finance the plant.
Transcorp and Heirs Holdings Chairman Tony Elumelu said the company is working with GE on the Ughelli plant expansion project.
Elumelu said, "With this, we've taken a bold step in fulfilling our promise to Transcorp's stakeholders and the people of Nigeria.
"In a very short period of time, we have achieved significant impact - power production has more than doubled, and with this agreement, we will see increased output before the end of this year. We are confident that this partnership with GE will further accelerate the achievement of our goals in the power sector."