All things being equal, the Federal Government may have
raked in about $2.238 billion or N358.045 billion from the
sale of 15 Power Holding Company of Nigeria, PHCN,
successor companies, which transaction deadline ended
yesterday.
The amount represents 7.18 percent of the national budget of
N4.987 trillion in 2013, making it the biggest privatisation
sales ever in the history of Nigeria and Africa.
The sum is derived from the $559.44 million already paid by
the 14 bidders as 25 percent of the total cost of their bids for
the respective distribution (Discos) and Generation (Gencos)
companies unbundled from PHCN.
Already economic experts have called for prudence in the
spending of the funds, saying “the government should account
for the disbursement of the money properly; it should not be
used for politics.”
However, there was no official confirmation on the proceeds
realised from the National Council on Privatisation, NCP, or
the Bureau of Public Entreprises, BPE, which executed the
sales.
NCP Chair speaks
Chairman, Technical Committee of NCP, Mr. Atedo
Peterside, told Vanguard on telephone that at least 13 of the
14 bidders that had paid their 25 percent bond for the 15
PHCN successor companies beat the 5p.m. yesterday deadline
for the payment of the balance of 75 percent of their bids.
He said: “I can confirm that nine bidders out of the 10 for the
Discos paid, four out of the five Gencos paid, one partially
paid because of issues with banks transfers.
“But we will only be able to say for sure by tomorrow (today)
how much was realised. Don’t forget some paid in Dollars
and some in Naira, and for some of those who paid in Dollars,
the amount will not hit our bank until tomorrow.”
Successful bidders
Among those that met the payment deadline were
Interstate Electrics Limited, Enugu Disco; Vigeo Consortium,
Benin Disco; Integrated Energy Distribution & Marketing
Company, Ibadan and Yola Discos, respectively; 4Power
Consortium, Port-Harcourt Disco, and Aura Energy for Jos
Disco.
Others are West Power & Gas, for Eko Disco; NEDC/
KEPCO, Ikeja Disco; Transcorp/Woodrock Consortium,
Ughelli Power Plc; Mainstream Energy Ltd, Kainji Power
Plc; Kann Consortium, Abuja Disco; Sahelian Power SPV,
Kano Disco; Amperion Power Company Limited,
Geregu Power Plc, and North-South Power Company for
Shiroro Power Plc.
Taking possession
By this payment, the bidders are now closer to taking
possession of the respective PHCN distribution and generation
companies they bided for, following approval by the Federal
Government.
This is even as organised labour has criticised the transaction
in view of outstanding issues.
However, any bidder which was unable to pay the balance of
the 75 percent will lose the 25 percent already paid, and the
slot for ownership for the company will be given to the
reserved bidder in that category.
Peterside said: “Any bidder that failed to meet his obligation
will lose the slot for that company, and we will hand it over to
the reserved bidder.”
Although he refused to give more details, he expressed delight
that the process had ended seamlessly, adding that it was left
for the new owners to get to work and give power to
Nigerians.
Bidders’ plans
Agreeing, one of the promoters of the Vigeo Group, Mr.
Victor Osibodu, disclosed that his group plans to invest
additional N40 billion into Benin Disco for infrastructure over
the next five years upon takeover.
He confirmed that his group paid $96.75 million as 75 percent
balance for their bid.
Similarly, West Power & Gas Limited, WPG, completed the
payment of US$101.25 million (N16.2 billion) for the
acquisition of 60 percent stake in Eko Disco.
According to a statement by the company, the payment was
made two days ahead of the BPE deadline, and follows
payment of the initial 25 percent deposit of US$33.75 million
(N5.4 billion) earlier this year.
The company further disclosed that the total amount of the
transaction is US$135 million (N21.6 billion).
Commenting on the completion of payment, Mr. Charles
Momoh, Chairman, WPG said: “Today marks a tremendous
milestone and a major step forward towards the completion of
the most significant privatisation of government assets in
Nigeria’s history.
“The success of the power transformation programme is
critical to the future development of Nigeria. WPG, along
with the other preferred bidders, fully appreciate the
magnitude of the task before us and are honoured to have
been selected.
“As a sector, we must work together to ensure we achieve the
desired results.
“As well as securing the finance to complete the acquisition,
WPG has brought together a world class team of local and
international industry experts to implement the rehabilitation
and expansion programme.
“We look forward to the completion of the acquisition process
and all matters to be resolved so we can begin the task of
transforming the power sector in the country.”
WPG raises N80bn
He further stated that over the years, WPG had raised close to
US$500 million (N80 billion) in equity and debt financing to
fund the acquisition of the Eko Disco and the significant
rehabilitation and transformation work required to improve
distribution network infrastructure and operations.
He noted that US$250 million (N40 billion) had been
allocated to rehabilitation, while the company had allocated
US$48 million (N7.68 billion) towards a power purchase
agreement with the Nigerian Bulk Electricity Trading, NBET.
Giving a background of the company, Momoh said: “West
Power & Gas Limited, WPG, is a Nigerian Power Investment
Holding Company established to invest in Nigeria’s fast
evolving power sector and to participate in the development of
the sector as a whole.
“The company is in the final stages of completing the
acquisition of the Eko Distribution Company and will explore
other opportunities for investment in the sector as a whole,
including generation.”
UBA finances Shiroro
Furthermore, Pan African financial services group, United
Bank for Africa, UBA, Plc, Tuesday, entered into a US$82
million financing deal with North South Power Limited, a
strategic investor in the power sector, to finance the
acquisition of the Shiroro Hydro-electric Power Plc
Concession.
The funds, arranged by UBA Plc and UBA Capital Plc,
facilitated payment of the balance of 75 percent of the
acquisition cost to BPE ahead of yesterday’s payment
deadline.
UBA Plc is the lead bank and Mandated Lead Arranger to the
transaction, while UBA Capital is the Mandated Lead
Arranger, Debt Adviser and Facility Agent.
According to the Group Managing Director, UBA Plc, Mr.
Phillips Oduoza, the seamless completion of the transaction
by all parties involved is a reflection of the capacity of
Nigerian banks to champion the financing of power reforms
project across the country.
He said: “This transaction is a milestone for the bank and we
are glad to be part of it. It is another demonstration of UBA’s
commitment, appetite and capability for big ticket
transactions.
“Importantly, it is our commitment to Federal Government’s
efforts in increasing capacity in the power sector. With our
partners, UBA Capital Plc, we strongly believe that this
financing will help in jumpstarting the much needed
investment in the power sector.”
Group CEO, UBA Capital Plc, Rasheed Olaoluwa noted that
the investment group had been an important partner in the
privatizasion process as it is currently advising three out of the
six generation companies recently conceded by Federal
Government.
800Mw target
Engineer Olubunmi Peters, Vice Chairman, North South
Power Company Limited, praised the commitment shown by
UBA Plc and UBA Capital Plc in raising the funds.
He said: “The two institutions have again shown commitment
to the power sector. With this fund, we are set to modernise
the Shiroro Hydro Electric Power.
“Our company intends to add 600 megawatts into the national
grid and add 200 megawatts in the third year.
”The financing was a major milestone for UBA Plc, UBA
Capital Plc, North South Power Company Limited and, most
importantly, the Nigerian power sector as the Federal
Government’s induced incentives to attract private sector
participation across the sector is coming into effect.”

www.vanguardngr.com/2013/08/phcn-fg-rakes-in-n358-04bn/

More money to private pockets..smh