Nigeria’s power sector future is beginning to look positively entrenched. After months of frenetic activities, the winning bidders for the 15 generation (Gencos) and distribution (Discos) assets of the Power Holding Company of Nigeria (PHCN) by the 14 buyers paid up the remaining 75 percent of the bid sum, marking a significant shift in strategy by the Federal Government on how electricity should be delivered to the consumers.

Atedo Peterside, Chairman of the Technical Committee on Privatisation, called it “a major milestone for Nigeria.”

“It is the day that the centre of gravity in power shifted from government to the private sector just like it happened in the telecoms sectors many years ago,” he told BusinessDay.

BusinessDay, as at press time confirmed that all the winning bidders had paid up except for Interstate Electricity Company, bid winners for Enugu Electricity Distribution Company and Shiroro Generation Company bid winner, North/South Power limited. Both failed to make the cut.

BusinessDay also confirmed that bid winners for the Sapele Generation Company fell short of its bid payment by $40 million after paying $110 million.

“Now that they have paid, the assets belong to them and we hope they can now go ahead to justify the investment they have made,” Peterside told BusinessDay.

The country is expected to realize about $2.5 billion (N402.5 billion) from this final phase of the exercise that began in February this year.

“We are moving into interesting times,” says Albert Okumagba, Group Managing Director/Chief Executive Officer of BGL Plc. “But let all stakeholders let the consumers know that they (investors) have a road map that will benefit all and how soon they intend to democratize their company. The consumers need to be reassured.”

Sam Amadi, chairman, Nigerian Electricity Regulatory Commission (NERC), said: “This means the ground has shifted from government total control and management to much more private sector involvement. It means we have succeeded in the two major planks of the power reforms which are the liberalisation of the sector for private investors to come in and the creation of an electricity market. Before now, there was no electricity market and no rules and regulations. Now, electricity is done on bilateral contracts with proper rules and regulations. It is a transformation and the President Jonathan should be commended for this.”

According to him, one of the initial steps to be taken by the new investors is to look at their license conditions and business proposals with which they won the bids and ensure that they fulfill them.

“NERC will ensure that they comply with the rules and provide quality service to the consumers.” Amadi added.

Solomon Adegbie-Quaynor, country manager of the International Finance Corporation (IFC) which recently unveiled its plans to support core investors in the sector to add 1,500MW to the national grid, said the investors should take stock of their assets to understand the positives and the weaknesses, adding that they need to also take stock of the people, to assess their expertise and competence.

“IFC is very happy to see the private sector get involved. While there are still some issues to be resolved, we think it is a welcome development.”

I think there is a clear commitment by all the relevant agencies involved in the privatisation to make it successful. The government leadership, the ministry of finance, BPE, NERC, and all the other agencies are going in the right direction. That makes for more coherence in the privatisation, compared to that of NITEL.

“Obviously, the entry of the private sector is going to be a positive development. The private investors will not want their investment to go down the drain so they will strive to turn the place around to recoup their investment through quality service delivery to the consumers,” said Akin Adetunji, executive vice chairman, Terra Energy Services Nigeria Limited.

He noted that some of the challenges to be faced by the new investors would include issues of gas supplies and transmission, adding that a lot of investment needs to be made to improve the transmission network and guarantee gas supply to power plants.

“The new investors should drive the government to its part particularly in the areas of gas supplies and transmission. Power that does not reach the consumers does not translate to money,” Adetunji said.

Analyst say focus will now shift to the more thorny labour related issues of the process to secure a sustainable transition road map. There were also questions around when the Power Holding Company of Nigeria (PHCN) will be extinct as an entity and the assets handed fully over to the investors.

But some top executives who spoke last night say they are already on the verge of fully resolving that.

“We have resolved at least 90 percent of any Labour related issues for us at the Ughelli power plant, says Adeoye Fadeyibi, MD/CEO Transcorp Ughelli Power Limited, whose company fully paid $300 million for its acquisition of the plant.

“We are excited about the take over and we will ensure the sustenance of the growth plan we have for the plant and we expect to officially take over within the next two weeks,” he told BusinessDay.

Bex Nwawudu, Cambridge University trained investment banker and director at CBO Capital, described the development as an excellent news.

“We have made solid progress. I understand the difficulty there can be completing a major privatization programme in the power sector in a place like Nigeria and not many expected that the process will end so well and so promptly.”

Funke Osibodu, Director at Vigeo which bought Benin Disco say they did not at any time entertain any doubt that we will meet the payment deadline.

“We have always believed in the privatization programme and we are able to assure electricity consumers in the four states which we will serve that our Disco is one with a difference. We have been close participants in the electricity delivery process and we intend to use our good knowledge of the business and superior skill to deliver top class service to our customers. We also delighted that the BPE and the government is playing their part.”

asha 80: what is wrong with emeka offor's interstate?

awodman:
You can ask me again..I think those guys are not ready to do business..Barth Nnaji's Eastern Electricity company as the reserved bidder will be expected to step in and pay-up..that will definitely be good news to Aba residents who have been drawn into a long battle between Emeka Offor's Interstate and Barth Nnaji's geometric for the control of Ariria and Aba business districts of PHCN...

@ topic..the history of a vibrant electricity industry in Nigeria has just been launched..Consumers will soon start enjoying

asha 80: really if interstate is not ready they should fccuuk off mehn..no time for such stupidities..give the reserve bidders the chance to take up the challenge haba.

awodman:
Meanwhile, Eastern Electric Company, the reserve bidder
for the Enugu Electricity Distribution Company, has
declared its preparedness to pay $126 million for the
takeover of the company, which provides power to the
South-eastern part of the country.

The company expressed its willingness in a statement
Wednesday by its communication consultant, Mr C. Don
Adinuba, following the inability of Interstate Electrics to pay
the remaining 75 per cent of the bid price at the close of
payment Wednesday.

The consortium was formed by the five South-east state
governments; Nestoil, a major indigenous operator in the
upstream sector of the petroleum industry; Aba Power Ltd
and Geometric Power Ltd, led by former Power Minister
Bart Nnaji and Diamond Bank’s founding chairman Pascal
Dozie, among others.

awodman:

Already Barth's company has indicated interest to pay up..see


www.thisdaylive.com/articles/13-bidders-pay-75-balance-for-power-assets/156944/

otokx: Lets hope for the best; no light still in UNIPORT.

otokx: Lets hope for the best; no light still in UNIPORT.

Sunny_bobo: Guy, u sef neva graduate from UNIPORT? It's been 12 years now for a 4 year course.

Sunny_bobo: Guy, u sef neva graduate from UNIPORT? It's been 12 years now for a 4 year course.

taharqa: Am almost in tears, right about now....

taharqa: Am almost in tears, right about now....

awodman: Elect/Elect Eng graduates will soon be on high demand...I sincerely hope and pray this private sector guys will bring in the desired change and efficiency we need in the power sector...Anyway they borrowed money from the banks,so no room for dulling

asha 80: awodman i think i have found out the reason interstate could pay the remaining 75 percent money for the bid.i would have posted the link if not that i typing with my phone.just go to 247ureports.com.it seems offor has fallen on financial hardtimes.

Sincere 9gerian: I wonder why this historic thread didn't make front page.

Sincere 9gerian: I wonder why this historic thread didn't make front page.

awodman:
Nna mehn..I have read the report...its really a pity ƒσя him..Kudos to the vice president and the NCP for upholding the sanctity of the privatization process..

asha 80: i wonder if it is 'nemesis'.

awodman:

I read in thisday that Offor is frantically lobying the NCP to bend the rules for him..pls NCP shouldn't joke oo..stick to the Damn rules