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BPE, NERC discuss power firms’ transfer to investors

By on September 11, 2013

Top officials of the Nigerian Electricity Regulatory Commission and the Bureau of Public Enterprises have met to work out modalities for the transfer of electricity companies carved out of the Power Holding Company of Nigeria to private sector investors.

The Assistant General Manager, Media, NERC, Maryam Abubarkar, confirmed this development in a statement made available to our correspondent in Abuja on Monday.

Present at the meeting, according to the statement, were the Chairman, NERC, Dr. Sam Amadi, and Director-General, BPE, Mr. Benjamin Dikki.

The meeting was held despite disagreements between the Technical Committee of the National Council on Privatisation and the BPE over the extension of time for preferred bidder for the Enugu Electricity Distribution Company, Interstate, to pay the 75 per cent balance of the bid price.

Although details of the decisions reached between the two government agencies could not be ascertained, Abubakar said the issues tabled at the meeting included the application of the Fit and Proper Guidelines and the business plans of the core investors.

Others were the framework for monitoring and enforcement of transaction agreements, and the formalisation of contracts pertaining to transmission, power purchase agreements, vesting contracts and gas supply agreements.

According to the statement, Amadi emphasised the importance of preparing grounds for a successful takeover by the investors.

He maintained that NERC would on its own strengthen the laid down procedures for monitoring and enforcement.

Amadi also stated that a priority of the commission was customer metering, without which, he said the industry could not stand.

The NERC boss said the owners of the new distribution companies would be required to adopt the existing metering scheme put in place by the commission or to provide a better alternative.

Another meeting has been scheduled for next week to review the Fit and Proper Guidelines as well as to agree on the mechanism for dealing with liabilities incurred post-handover, Abubakar said.

Eighteen electricity firms were carved out of the PHCN as part of the process to reform the electricity generation and distribution industry.

These included the Transmission Company of Nigeria, 11 distribution companies based on geographical coverage and six generating companies.

Out of the successor companies, core investors have emerged for 10 distribution companies and five generating companies. The process for the emergence of core investors for Afam Power Plc (a generation company) and Kaduna Electricity Company is currently ongoing.

While the prospective core investors have concluded payment for nine Discos, the payment for the Enugu Electricity Distribution Company has been shrouded in controversy.

The preferred bidder for the company, Interstate, owned by business mogul, Mr. Emeka Offor, failed to meet the August 21 deadline to complete the payment.

However, the privatisation agency has failed to invite the reserve bidder, Eastern Electric, being promoted by a former Minister of Power, Prof. Bath Nnaji, to take the slot as required by the privatisation rule.