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FG, States, LGs may earn $5.8bn from sale of 10 NIPP plants

By BusinessNews Staff on March 9, 2014

A total of about $5,814,002,617 is expected to be earned by the federal, states and local governments of the federation as proceeds from the sale of 10 National Integrated Power Projects (NIPPs) thermal generation plants when the privatisation exercise is completed.

The sum is a compilation of the overall bid prices put forward by 10 companies and consortiums that emerged preferred bidders for the 10 power plants whose financial bids were opened yesterday in Abuja by the Joint Transaction Technical Committee (JTTC) set up by the board of NIPP and Niger Delta Power Holding Company of Nigeria (NDPHC) Plc to consummate the privatisation of the plants.

Proceedings for the opening of the financial bids for the plants with a combined generation capacity of 5,454 megawatts (MW) were conducted by the Chairman of the JTTC who is also the Governor of Benue State, Gabriel Suswan alongside the Minister of State for Power, Mohammed Wakil.

Also on hand for the opening of the financial bids were the Chairman of the Technical Committee of the National Council on Privatisation (NCP), Atedo Peterside; Managing Director of NDPHC, James Olotu; Director General of the Bureau of Public Enterprises (BPE), Benjamin Dikki and the Permanent Secretary, Ministry of Power, Godknows Igali .

Also, 10 reserve bidders emerged yesterday to displace any of the preferred bidders that fail to meet up with extant transaction guidelines in the privatisation process.

The financial bid documents which were opened before the representatives of all the bidding companies showed that the preferred bidders for the plants are: AITEO Consortium which placed a bid price of $902 million to buy 80 per cent stakes in the 1,131MW Alaoji power plant; EMA Consortium which won its bids for 508MW-Benin and 634MW-Calabar power plants with $580 million and $625 million respectively and Dozzy Integrated Power Limited which emerged as preferred bidder for the 381MW-Egbema plant with a bid price of $415,075 million.

KDI Energy Resources put in $340 million to emerge preferred bidder for the 254MW-Gbarain plant and Seoul Electric Power Limited with $690.200 million for the 506MW Geregu plant.

Daniel Power Consortium won its bid for the 508MW-Ogorode power plant with a bid price of $531.777 million; ENL Consortium Limited won the 754MW-Olorunsogo plant with a bid price of $751.240 million; Shayobe International Limited Consortium won the 265MW-Omoku plant with a bid price of $318.710 million while the bid for 513MW-Omotosho plant was won by Omotosho Electric with a bid price of $659.999 million.

The reserve bidders include Index Consortium for Benin with $575 million bid price; Nebula Power Generation Consortium for Calabar with $623 million; AITEO Consortium for Egbema with $392 million; Azikel Power Limited for Gbarain with $305 million and YellowStone Electric Limited for Geregu with $613 million.

Others include ESOP Power Limited for Ogorode with $510 million; Index Consortium for Olorunsogo with $730 million; AITEO Consortium for Omoku with $312 million and ENL Consortium Limited for Omotosho with $645 million.

Alaoji plant had no reserve bidder as AITEO Consortium (which also forfeited a $1 million bid bond for opting out of its bid for Olorunsogo late in the process) was the sole bidder for the largest power plant in the NIPP framework.
The Geregu and Omotosho power plants have so far been commissioned for operation by President Goodluck Jonathan while others are perhaps waiting for their commissioning.

Suswan stated that the process had been transparent from the onset and would continue to be until its concluded.

He explained that the financial bids will be ratified in a matter of weeks by the board of the NIPP in conjunction with the JTTC, after which the preferred bidders will be invited to make their payments.

The governor also hinted that the next phase of the privatisation exercise will include payment of bid prices and execution of agreements between the preferred bidders and the NDPHC in line with established NIPP transaction timeline.

The NIPP is an integral part of government’s efforts to alleviate power shortages in the country and it was conceived in 2004 as a fast-track public sector funded initiative to add significant new generation capacity to Nigeria’s electricity supply system along with the electricity transmission, distribution and natural gas supply infrastructure required to deliver the additional capacity.

The government had also incorporated (NDPHC) in 2005 to serve as the legal vehicle to contract for, hold, manage and operate the assets developed and built under the NIPP using private sector best practices.

[This Day]

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