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FG approves privatisation bids for power companies

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[FILE PHOTO] Transmission Company of Nigeria station. PHOTO :Iwin.org.ng

The National Council on Privatisation (NCP), has approved Transcorp Power Consortium as the preferred bidder for the Afam Electricity Generation Company (Afam Power Plc and Afam Three Fast Power Limited), with a bid price of N105.3billion (about $343.6million) and Diamond Stripes Consortium as the reserve bidder with N102.3billion.

Similarly, the Council also approved Quest Electricity Nigeria Limited as the preferred bidder for the re-privatised Yola Electricity Distribution Company (YEDC), with a bid price of N19billion ($62million) which is above the $59million paid by the previous core investor in 2013, given the exchange rate and inflation realities. .

The decisions were taken by the NCP, chaired by the Vice President and Chairman of Council, Prof. Yemi Osinbajo, at the 2nd Meeting of the NCP for 2019, held at the Presidential Villa, Aso Rock, Abuja recently.

According to the Bureau of Public Enterprises (BPE), apart from YEDC getting a higher bid, Transcorp Power Consortium also plans to invest $350million in Afam over a period of five years after take over.

Recall that the Council at its first meet on April 12, granted approval to Diamond Stripes Consortium, Transcorp Power Consortium, and Unicorn Consortium to proceed to the financial bids opening stage for the acquisition of 100 per cent shares in Afam. This is sequel to having met the benchmark score of 750 points after evaluation in accordance with the criteria set out in the Requests for Proposal (RfPs).

It also directed Quest Electric to proceed to the financial bids opening stage for the re-privatisation of the YEDC.

Also recall that the privatisation of Afam Company could not be concluded during the first round of the power privatisation in 2013, due to issues related to gas supply to the plant.

Following the termination of the Share Purchase Agreement (SPA) signed between Taleveras (then Preferred Bidder) and BPE in 2016, the Council at its 1st Meeting in August, approved the privatisation of Afam based on a strategy to be recommended by the Transaction Advisers.

For the YEDC, although it was successfully privatised and handed over to the core investor in 2013, a force majeure was declared in 2015, by the investor citing insecurity in the North-East region of the country. Following this, the company was duly repossessed by the Federal Government.

It is expected that the successful bidders will be responsible for operating the generation and distribution companies, making the necessary investments to improve the generation and distribution networks, and customer service in line with the Government’s objectives as set out in the National Electric Power Policy.


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