[size=14pt] Power firms: Oando, Indian company, others to express interest
[/size] Published 2/7/2011 5:01:00 AM
Power firms: Oando, Indian company, others to express interest
MARTIN AYANKOLA
As the deadline for the expression of interest in the power generating and distribution companies unbundled from the Power Holding Company of Nigeria approaches, MARTIN AYANKOLA reports that renowned local and foreign firms are currently putting finishing touches to their bid documents.
A leading player in Nigeria’s energy industry, the Oando Group, and an Indian company, Essar, are at the forefront of the different consortia that are expected to express interest in the Federal Government’s power firms on February 18.
The Bureau of Public Enterprises has asked prospective investors to submit Expressions of Interest for eleven distribution companies, four power generating firms and two hydro power stations slated for privatisation.
A source at the Oando Group told our correspondent on Sunday, “We are going to show firm interest in some distribution companies and a power generation firm.
“We are leading a consortium that also includes a multinational power company. I cannot reveal the name of our partners to you now, but we are definitely expressing an interest.”
Another source at the Bureau of Public Enterprises also disclosed that Essar, the Indian power giant, was showing serious interest in the generation and distribution firms.
“I expect them to show firm interest in the companies. Some other foreign firms are also in discussion with Nigerian firms with a view to forming consortia to express interest and later bid for the power firms,” the source added.
The Oando source, who is a top official of the integrated energy company, said, “We are so far satisfied with what the government has done as regards sticking to the timetable for the privatisation of the sector.
“We think the government has shown commitment and seriousness so far and with the right political will, the process will be successful.”
He added, “However, the true level of government’s seriousness will be determined by what is done after the Expressions of Interest in the firms”.
A power analyst and Managing Director of Powercap Limited, Mr. Abiodun Ogunleye, also gave kudos to the Federal Government for implementing the privatisation timetable to the letter.
Ogunleye told our correspondent on the telephone on Sunday, “The Federal Government has been serious with the timetable. However, the issues we need to address relate to whether the time is long enough for serious investors to express interest and the need to ensure that the process is not hijacked by politicians.”
The BPE had also embarked on road shows since January 18, to woo investors to the Nigerian power industry, starting with a meeting with investors in Lagos.
Aside from the Lagos event, meetings had also been held with investors in Dubai, United Arab Emirates on January 24; London, United Kingdom, on January 27; and New York, United States on February 1; while another meeting will be held with investors in Johannesburg, South Africa, on February 11.
The spokesman for the BPE, Mr. Chukwuma Nwokoh, told our correspondent on the telephone on Sunday that over 200 individuals attended the London event.
“We also had over 90 people in attendance in Dubai,” he added.
Furthermore, the Federal Government has offered prospective investors a five-year tax holiday as part of incentives to woo them to the power sector.
According to the BPE, another incentive for investors is the World Bank’s instruments to insure their investments against political risks.
The agency also assured investors of a cost-reflective tariff regime and pledged to resolve all labour matters before the handover of the companies to the core investors.
The meetings with the investors are coming ahead of the February 18 deadline for the expression of interests in 11 distribution companies, five thermal generating firms and two hydropower stations.
Speaking at the Lagos event, the Director-General, BPE, Ms. Bola Onagoruwa, said, “The idea of this is that it enables investors to gain some confidence. Even if we don’t complete the privatisation before the handover of government, no harm is done.
“From the response you have seen here, power is something that has attracted the interest of most people in Nigeria. I don’t think any administration will come in and not take the issue of reforms in the power sector seriously.”
The eleven distribution companies, which investors are expected to express interest in, include the Abuja Electricity Distribution Company Plc; Benin Electricity Distribution Company Plc; Enugu Electricity Distribution Company Plc; Eko Electricity Distribution Company Plc; Ibadan Electricity Distribution Company Plc and Ikeja Electricity Distribution Company Plc.
Others are Jos Electricity Distribution Company Plc; Kaduna Electricity Distribution Company Plc; Kano Electricity Distribution Company Plc; Port Harcourt Electricity Distribution Company Plc and Yola Electricity Distribution Company Plc.
Investors are also expected to express interests in four thermal generating stations, namely: Ughelli Power Plc; Geregu Power Plc; Afam Power Plc; and Sapele Power Plc.
Two hydro power stations; Kainji Power Plc, including the Jebba power station, and Shiroro Power Plc, will be given out to private investors under a concession arrangement.
Also, speaking at the forum, the Minister of State for Power, Mr. Nuhu Wya, said that both local and international investors were invited to the forum to show the numerous opportunities available in Nigeria’s power sector.
According to him, the forum is also to share with investors, the precise details of the Federal Government’s privatisation plans and strategies for the divestiture of PHCN successor companies and other assets.
He said, “Altogether, these assets deliver about 4,000 megawatts today. The Vision 2020 envisages a market for 40,000MW in 10 years’ time; that is, by 2020.
“This growth, which is quite plausible, has to be driven by Greenfield private sector investments. Our mission in this forum is to have a better understanding of your concerns so that we can build a power supply industry that works for all and grows fast enough to cope with demand.”
The Chairman, Presidential Task Force on Power, Prof. Barth Nnaji, also told our correspondent on the telephone that the response of prospective investors to the road shows had been impressive. http://www.punchontheweb.com/Article2Print.aspx?theartic=Art20110207618231 |
