The Federal Government on Thursday commenced the process of handing over 10 Distribution Companies and five Generation Companies to the preferred bidders with the formal signing of Sale and Purchase Agreement with them at a well attended ceremony in Abuja.
The Discos and Gencos are successor companies that were established after the unbundling of the Power Holding Company of Nigeria in line with the ongoing privatization of the nation’s moribund power sector.
After the signing, the preferred bidders are expected to make down payment of 25 per cent of the share purchase price within 15 business days and to pay the outstanding balance of 75 per cent after 90 working days.
Speaking, Vice President Namadi Sambo, who chairs the National Council on Privatization, described the event as “important landmark”.
Sambo said it marked several important milestones in the ongoing reform of the Nigeria Electricity Supply Industry.
He expressed delight that the “GENCOS would today be signing Ancillary Agreement with the Transmission Company of Nigeria Plc” to pave way for compensation to providers of services in line with the best practice in the power sector.
Sambo noted that the signing ceremony marked important milestone in the ongoing reform of the Nigeria Electricity Supply Industry.
Represented by the Minister of Power, Prof. Chinedu Nebo, Sambo expressed appreciation to the World Bank for “its support towards making these agreements bankable through the provision of Partial Risk Guarantee credit support instrument.”
Tony Elumelu, the Chairman of Transcorp/Woodwork, whose company, Transcorp, emerged the prefereed bidder for Ugheli Power Plant at the cost of $300 million, promised to turn around the plant.
Elumelu described the signing of the agreement “as a significant day for Nigeria,” expressing optimism that very soon,Nigerians will start enjoying regular power supply.
His words: “Today is a very significant day for Nigeria, significant because the issue of Public Private Partnership is in action.
“For us at Transcorp, it is a very symbolic platform that we have just acquired.
“We are strong in the business of turnaround.
“We know how to turn around businesses.
“The new plant that we have just acquired is one that is going to provide a platform for us to demonstrate in a bigger landscape what we are used to doing on turn around of businesses.
“We believe that power is so significant for the economic development of the country.
“Not only economy but also social development of the country.
“When we get power right, it will lead to the development of Nigeria’s economy and will touch the society in so many other areas.
“And for us, this is what we preach.
“We must use our platform to create economic prosperity as well as social wealth.
“So, it is a good day for Nigeria and good luck to everyone of us and congratulations to government for making this happen.”
Elumelu also spike on the expected high tariff, saying what matters for now is for the supply to be regular.
He said: “I think cost is one thing but more importantly is availability.
“Today, the total cost of power to us in Nigeria is very high.
“You have generators, you have diesel, you have air pollution, cancer is on the rise in Nigeria now because the air is polluted.
“If you factor these costs, both economic and social cost, and the fact that businesses are not doing well in Nigeria, the thing for us is first, let there be light.
“Once there is light, let’s now begin to talk of the cost but let everyone who want light have access to electricity.”
The Federal Government commenced the process of reforming the power sector in 2005 with the enactment of the Electricity Power Sector Reform Act that eventually paved the way for the privatization of the PHCN successor companies.
The preferred bidders for the Discos as approved by the NCPC are:
. Kann Consortium for Abuja Successor Company at $164 million
. Vigeo Power Consortium for Benin at $129 million
. West Power & Gas for Eko at $135 million
. Interstate Electrics Limited for Enugu at $126 million
. Integrated Energy for Ibadan at $169 million
. NEDC/KEPCO for Ikeja at $131 million
. Aura Energy Ltd for Jos at $82 million
. Sahelian Piwer SPV Ltd for Kano at $137 million
. 4Power Consortium for Port Harcourt at $124 million
. Integrated Energy Distribution & Marketing for Yola at $59 million
. Amperion for Geregu Plant at $132 million
. Mainstream foe Kainji Plant at $50.76 million plus commencement fee of $237,870,000
. North-South for Shiroro Plant at &23.60 million plus commencement fee of $111 million
. Transcorp/Woodrock for Ugheli Plant at $300 million
. CMEC/Eurafric for Sapele Pant at $201 million.