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From Jude Chinedu, Enugu
The Enugu State Governor, Peter Mbah, has begun the resuscitation of various dormant companies and industries located in different parts of the state in line with his campaign promise to rehabilitate the state’s many assets to become productive.
Many of the moribund assets, such as the United Palm Products Limited, Aluminum Smelting Company at Ohebe Dim, Hotel Presidential in the state capital, and Nigergas Limited, Emene, date back to the government of the defunct Eastern Region led by former premier, Dr. Michael Okpara, while some others like Sunrise Flour Mills were founded by the Senator Jim Nwobodo administration in the Second Republic.
The government recorded a huge milestone last week when it signed a N100 billion deal with Pragmatic Palms Limited, a subsidiary of Diamond Stripes Limited, to resuscitate the moribund Enugu State United Palm Products Limited (UPPL). Pragmatic Palms is expected to invest multiple billions of Naira to revive the asset.
Speaking during the signing of the agreement at the Government House Enugu, Mbah said the move was in line with his administration’s determination to grow the state’s economy from $4.4 billion to $30 billion, and “a moment we must all be very proud of because it represents a major leap in our quest towards the revival of our dormant assets in line with our vision and the promises we made to our people.
“This investment outlay of over N100 billion is very significant because we also see agriculture beyond food security. We see agriculture as business.
“I want to assure you that the government you are dealing with is business-facing, and given my background as an entrepreneur, we understand what it means to have the ease of doing business. “So, what we are doing here today will mark the beginning of great things ahead,” Mbah stated.
Speaking on the significance of the deal, the Commissioner for Trade, Investment and Industry, Adaora Chukwu, said: “What we did today was the partial handover and the contract signing of UPPL to a company called Pragmatic Palm Ltd, which is a subsidiary of Diamond Stripes Ltd.
“The economic significance is huge; the number of jobs it will create, and the multiplier effects in terms of increasing production in the oil palm industry. You know that oil palm is an export commodity. We are talking about the forex earnings into the state and also the building of capacity in-house, as well as skills and technology transfer to Enugu State.”
In his remarks, the Managing Director/CEO of Pragmatic Palms, George Nwangwu, said that palm products were in high demand, noting that UPPL was capable of kick-starting the economic transformation of Enugu State.
“Permit me to talk about Diamond Stripes, the parent company of Pragmatic Palms, our Special Purpose Vehicle (SPV) for this project. Diamond Stripes is one of the leading investors in private sector-led financing for infrastructure in Nigeria. We have been involved in some of the most critical projects in Nigeria. We came home to invest in Onitsha River Port, where we are the sole investor. In agriculture, we have invested hugely in silos across Nigeria.
“We realise the importance of this particular asset, its catalytic purpose capable of spurring a lot of economic activities, and of course, creating a lot of opportunities in the state; and we are not unmindful of that.
“We realise that one of the key projects of Dr. Okpara was towards the agricultural sector, and the revolution in the Eastern part of the country, and Enugu State is the capital of the Eastern region. His motor then was pragmatic socialism. So, we choose that name for a particular reason – to tie it to the spirit of what you are trying to do. Therefore, we know the historical importance of this asset, and we feel that we can add value.”
Meanwhile, contrary to claims in some quarters that the government awarded a N100 billion contract to a newly registered company, the Senior Special Adviser to Governor Mbah on External Relations, Uche Anichukwu, said that government did not award a contract or contribute a dime. Instead, Pragmatic Palms would provide finance to the tune of 60 percent of the transaction value, while the Enugu State Government will provide the plantations valued at 40 percent equity.
He added that the state’s interest was well protected in the deal, benefitting from Mbah’s experience as an investment finance expert and an entrepreneur, who had handled multi-billion-dollar projects.
On the date of incorporation of the company, Anichukwu said that because several parties/investors were involved, it became imperative, as is the best international corporate practice, to register a Special Purpose Vehicle (SPV) as the platform to transact the deal, adding that Pragmatic Palms Limited was duly incorporated before the signing of the agreement.
He equally said: “For the avoidance of doubt, however, although it is not the case in this instance, it is apposite to also note that Section 96 (1) of the Companies and Allied Matters Act (CAMA), 2020, provides for pre-incorporation contract.”
He further explained that as demanded by the Enugu State Government, Pragmatic Palms Limited provided a corporate guarantor and bank guarantor. The government also demanded for and got bank guarantors from Pragmatic Palms.
Importantly, performance targets and timelines were equally set in the agreement for Pragmatic Palms Ltd, failing which the Enugu State Government is free to revoke the deal and reassume total ownership of UPPL.
“As demanded by the Enugu State Government, Pragmatic Palms Limited provided a guarantor, which is Diamond Stripes Limited, a reputable and huge company that has done investments worth over $20 billion spanning power and renewable energy sector, port sector, and agricultural sector since 2013. Diamond Stripes Limited is the sole investor in Onitsha River Port and has invested heavily in the agricultural sector, where it is the largest owner of silo complexes in Nigeria.
“It was involved in the acquisition of 600MW Shiroro Hydroelectric Power Plant in 2013, concessions of 30MW Gurara Hydroelectric Power Plant in 2019, and establishment of 300MW Shiroro solar power project in 2021.
“In addition, the Enugu State Government is represented on the company’s board, including the chairmanship of the board, as part of the steps taken to secure the state’s interest,” he stated.
On the experience and capacity of the Managing Director of the Pragmatic Palms Limited, which is the SPV, Anichukwu said: “The MD of Pragmatic Palms Limited, who is also the MD/CEO of Diamond Stripes, George Nwangwu, is a professor of Project Financing Law, who has led transaction teams that have participated in the consummation of over 100 privatisation of Public Private Partnership (PPP) transactions worth over $20 billion across Africa.
“Prof Nwangwu was the Head of Infrastructure Finance at the Ministry of Finance under the leadership of Dr Ngozi Okonjo-Iweala, during which he led the team that delivered the second Niger Bridge deal.
“So, clearly, it is a new dawn for the United Palm Products Limited to the benefit of the people of Enugu State after decades of rot and neglect. The partnership is promising and the project is in good hands.”
Meanwhile, the state government has awarded a contract for the rehabilitation of the long-abandoned Hotel Presidential, Enugu, while also currently perfecting the terms of agreement for the resuscitation of the state-owned Nigergas Company Limited.
Briefing correspondents recently, the Commissioner for Information and Communication, Aka Eze Aka, and his Culture and Tourism counterpart, Dame Ugochi Madueke, said that revamping the establishments would create economic value-chain, market, boost tourism and churn out employment for our youths.
On Nigergas Company, MD/CEO of the Enugu State Investment Development Authority, Dr. Sam Ogbu-Nwobodo, said the demand for medical oxygen and industrial gas in the country far outpace the supply, hence, the need for the state government to partner a reliable private player with proven integrity and track record to revamp this Nigergas and take advantage of the huge inherent opportunities.
“The re-engineering, refurbishment, and subsequent commissioning of Nigergas is a deliberate step by the Mbah administration to provide the much-needed medical oxygen and industrial gas for the South East and the entire country because the country is hugely underserved.
“The profitability profile, commercial and investment have been vetted with prospects of huge profit. We have everything on ground, and our timeline to kick off is certain. What remains is the paperwork because we already have the approval of the governor and now that of the state exco,” he added.
For Enugu’s fallow assets, it is no doubt that a season that could be referred to as ‘The Great Revival’ in the future, has come as Mbah breathes fresh air of life into them.
