FG hands over Power Distribution Companies to new owners
- Category: REPORTS
- Friday, 01 November 2013
- By Admin
History was made today (Friday) as the Federal Government of Nigeria has successfully handed over the Eko Distribution Company, Marina, Lagos to its new owners and core investors, West Power and Gas Limited. FGN also on Friday handed over the Abuja Distribution Company Plc (DISCO) to its new owner, KANN Consortium Utility Company Ltd, the News Agency of Nigeria, NAN, reports.
The ceremony took place in 10 different venues simultaneously across the country where other PHCN facilities were handed over to core investors and new owners.
Vice President Namadi Sambo, who handed over the Abuja DISCO, said that the event was to formally hand over the physical assets of the old PHCN to their new owners. Sambo, who is also the Chairman of the National Council on Privatisation (NCP), said that the assets were the property of five Generation Companies and 11 Distribution Companies.
The Minister of Power, Prof. Chinedu Nebo, represented Sambo at the occasion.
The News Agency of Nigeria (NAN) reports the privatised generating companies are Geregu Power Plc, Ughelli Power Plc, Egbin Power Plc, Kainji Hydro Electric Plc and and Shiroro Hydro Electric Power Plc.
The 10 privatised Distribution Companies (Disco) are located in Abuja, Benin, Eko, Ibadan, Ikeja, Jos, Kano, Port-Harcourt, Yola and Enugu.
Sambo noted that the successful handover was made possible by President Goodluck Jonathan's unparalleled leadership and commitment to ensure that there was provision of stable power by the present administration to people.
He said that the event was taking place simultaneously at the headquarters of the state capitals across the country.
Sambo explained that the handover was borne out 14 years of painstaking efforts by NCP and the Bureau of Public Enterprises.
He noted that Nigeria would not attain its desired economic growth without adequate power supply, adding that this informed the power sector reforms.
Sambo said that the critical programme began in 1999 with the inauguration of the Electricity Power Implementation Committee which led to the development of the National Electricity Power Policy of 2001.
He explained that the enactment of the Electricity Power Sector Reforms Act of 2005, and the establishment of PHCN were to reinforce the repeal of the defunct NEPA Act.
Sambo said that the new Act made it possible to create 18 companies by unbundling PHCN into three categories namely generation six companies, transmission one company and the distribution 11 companies.
He said that 2005 Act changed the legal and regulatory environment for the power sector in Nigeria and sought to create a sustainable electricity supply industry to the country.
According to the Vice President, the reform is a necessary tool for laying a solid foundation for sustainable power generation and service efficiency in the sector.
Sambo said that the opening of the industry to private hands would create job opportunities, improve efficiency also engender private sector investment among others.
He said that the challenges facing the sector were enormous as well as its benefits, noting that government would create enabling environment that would suit the investors.
Earlier, Alhaji Shehu Malami, the Chairman of Board of Directors of KANN Consortium Ltd., called on Nigerians and all stakeholders in the industry to exercise patience for the new successor companies.
NAN reports that so far, out of the 16 successor companies scheduled for handover, a total of 2.5 billion dollars was realised as proceeds.
The Sapele Generation Company was not affected by the exercise because the NCP directed its legal committee to undertake a comprehensive legal review of the status of the company.
This was as a result of the preferred bidders failure to complete payment for the company.
Performing the ceremonial handover in Lagos on Friday, the chairman of the National Council on Privatisation, Vice President Namadi Sambo, represented by the Minister of Industry Trade and Investment, Olusegun Aganga, said that the Nigerian Electricity Regulatory Commission (NERC) and Bureau of Public Enterprises (BPE) would monitor the operations of the core investors to ensure they stick to the rules of engagement.
He also expressed optimism that Nigerians will begin to reap the fruits of the privatisation process.
According to a statement by the Head, Public Communications of BPE, Chigbo Anichebe, the successor companies to be handed over and their new owners are
1. Abuja Distribution Company (KANN Consortium Utility),
2. Benin Distribution Company (Vigeo Power Consortium),
3. Eko Distribution Company (West Power & Gas),
4. Enugu Distribution Company (Interstate Electrics Ltd) and
5. Ibadan Distribution Company (Integrated Energy Distribution & Marketing Ltd).
Others are
6. Ikeja Distribution Company (NEDC/KEPCO Consortium),
7. Jos Distribution Company (Aura Energy Limited),
8. Kano Distribution Company (Sahelian Power SPV Ltd),
9. Port Harcourt Distribution Company (4Power Consortium) and
10. Yola distribution Company (Integrated Energy Distribution & Marketing Ltd).
[NOTE: Missing here is 11. Kaduna Distribution Company (to North Power Company)]
The Generation Companies are
1. Shiroro (North-South Power Company),
2. Kainji (Mainstream Energy Solutions Ltd),
3, Geregu (Amperion Power Distribution) and
4. Ughelli (Transcorp Ughelli Power Plc).
[NOTE: Missing here are Afam (to Telaveras Group) or Egbin (to KEPCO) and Sapele (to CMEC/EUFRAC JV) Generation Companies]
QUOTEFrom PHCN, Nigeria has created 18 successor firms comprising 11 for electricity distribution, 6 for power generation and one for transmission.
UNQUOTEMy People:Without adequate power, a nation is a joke.With PHCN privatized IN THE WAY THAT IT HAS, a quiet revolution may have begun November 1, 2013, whose outcome we are yet to see under light....no pun intended.Bolaji AlukoFIGURE 1: POWER VALUE CHAIN GRAPHIC
Nigeria scraps underperforming state power firm
Abuja (AFP) - Nigeria on Friday formally scrapped its inefficient and graft-ridden electricity firm and handed its assets to private investors in a bid expected to improve power supplies in Africa's most populous nation.
The investors who have become beneficiaries of the nation's privatisation drive include Seoul-based Korea Electric Power Corporation as well as local investors.
"The PHCN (Power Holding Company of Nigeria) has essentially ceased to exist," Power Minister Chinedu Nebo said at a brief ceremony while handing over the Abuja (power) Distribution Company to its new owner.
"We now have distribution, generation and transmission companies. So, it is no longer PHCN," Nebo said.
The privatisation of PHCN has long been in the works in Africa's most populous nation and second largest economy, where blackouts occur multiple times daily despite the country's status as the continent's largest oil producer.
From PHCN, Nigeria has created 18 successor firms comprising 11 for electricity distribution, 6 for power generation and one for transmission.
Nigeria has portrayed the privatisation of electricity generation and distribution as a reform capable of finally bringing steady power supplies to the country, where businesses are forced to rely on diesel or petrol generators to cope.
President Goodluck Jonathan in September handed over operating licences to investors for most of the companies created from the splitting up of the PHCN after payment of a total sum of about $2.5 billion. (1.85 billion euros)
Nigeria will retain ownership of the national grid, but privatise its management. Canada's Manitoba Hydro International was named as its manager for three years in 2012.
The privatisation of telecommunications in Nigeria is generally credited with bringing improved service and accessibility to the country.
However, critics have expressed concerns that many of the bidders for power assets have been politically connected barons in Nigeria and questioned whether the assets will be properly managed.
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SOME ARCHIVAL INFORMATION
THIS DAY
13 Bidders Pay 75% Balance for Power Assets
22 Aug 2013
Prof Chinedu Nebo, Power Minister
• Vigeo Consortium, nine more firms pay up
•NERC, NBET, IPPs meet on securitisation framework in power sector
Chineme Okafor
Thirteen of the preferred bidders for successor generation and distribution companies created from the unbundling of Power Holding Company of Nigeria (PHCN) have finally paid up their 75 per cent outstanding balance of bid prices for their acquired assets to beat the payment deadline, which expired Wednesday.Three of the bidders, West Power and Gas, Integrated Energy Distribution and Marketing Company and Amperion Power Company Limited, were the first to beat the deadline, as exclusively reported by THISDAY Wednesday.
While West Power, the preferred bidder for Eko Distribution Company (Disco) Plc and Integrated Energy, for both Ibadan and Yola Distribution Companies paid up the 75 per cent balance for the distribution and generation companies being sold to investors through the privatisation process, Amperion made a part-payment of $45.16 million (N7 billion) for the 414 megawatts (MW) Geregu I thermal power station. By yesterday, it had paid the balance.
THISDAY checks revealed yesterday that 10 more bidders met their financial obligations under the privatisation of the power sector while one of the bidders made part-payment to meet up with the final payment deadline set by the Bureau of Public Enterprises (BPE), which is superintending the privatisation process.
Also yesterday, the Independent Power Producers Association of Nigeria (IPPAN) met with the Nigeria Electricity Regulatory Commission (NERC) and Nigeria Bulk Electricity Trading Company Plc (NBET) to address issues that could militate against its eventual construction of licensed power plants in Nigeria.
It was gathered that the preferred bidders who had fully met the payment deadline as at the expiration of the 5pm deadline yesterday included NEDC/KEPCO, the preferred bidder for Ikeja Distribution Company; Vigeo Consortium, for Benin Distribution Company; 4 Power Consortium for Port Harcourt Distribution Company; Aura Energy for Jos Distribution Company; Kann Consortium for Abuja Distribution Company and Sahelian Power for Kano Distribution Company.
Also, Transcorp/Woodrock Consortium, the preferred bidder for Ughelli Power Plc; Mainstream Energy Ltd, the preferred bidder for Kainji Power Plc; Amperion for Geregu, KEPCO for Egbin and CMEC/EUAFRIC Energy JV, which made part-payments for the acquisition of Sapele Power Plc, have met the deadline.
Following the 75 per cent payment earlier made on Tuesday by West Power and Gas and Integrated Energy Distribution and Marketing Company for Eko, Ibadan and Yola distribution companies respectively, THISDAY gathered yesterday in Abuja that the BPE had as at press time confirmed the payments made by these bidders.
However, Interstate, which is the preferred bidder for Enugu Distribution Company and North-South Power Company, for Shiroro Power Plc, might have missed the deadline for the payment of the 75 per cent balance because as at the 5pm deadline, their payments, if any, had not been confirmed.
The privatisation agency had insisted that it would not grant the request for extension of deadline for the payment of the 75 per cent outstanding balance by the preferred bidders of the various generation and distribution companies.
Following the rejection of the request, the BPE had from Tuesday begun to take in payments from some of the preferred bidders, starting with West Power and Gas, which paid $101.25 million as being full and final payment for the acquisition of Eko Disco as well as Integrated Energy Distribution and Marketing Company, which was said to have paid $160 million for the acquisition of Ibadan and Yola Discos.
Sources close to the transaction stated that Vigeo paid $96.75 million for Benin Disco, being 75 per cent of its outstanding balance to acquire 60 per cent of the stake in the utility company, while NEDC/KEPCO paid $407 million as full and final payment for its interest in Egbin Power Station.
NEDC/KEPCO also paid its 75 per cent outstanding balance for its acquisition of Ikeja Discos, which is $101 million; it had initially paid $33.75 million six months ago, being its initial deposit of 25 per cent for its acquisition.
The duo of Transcorp/Woodrock Consortium and Mainstream Energy Ltd was also confirmed to have made payments to beat the deadline.
In line with the privatisation transaction schedule and guidelines, it is expected that any of the preferred bidders that missed the payment deadline will automatically forfeit its initial 25 per cent deposit for its respective assets while at the same time losing its preferred bidder's status in the process.
Some of the bidders had last week started to drag their feet in the hope that the payment deadline would be extended by NCP, which alongside the BPE eventually dashed their hopes on Monday when they both insisted that the August 21 payment deadline remained sacrosanct as stipulated in the Request for Proposals (RFPs).
The bidders had expressed concern that the federal government had not been able to meet the conditions precedent that would give their lenders comfort to finance the acquisitions.
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.
"We have a robust and matchless combination of global best practices and the best experience of emerging economies.
"We shall not have difficulty raising the funds. The Bureau of Public Enterprises is still holding on to our $10m bank bond raised when we were bidding for the Enugu Disco.
"As all Nigerians must have known, the 141MW Aba integrated power project built by Geometric Power and which cost over $450 million is about to be commissioned," the statement said.
In a related development, IPPAN Wednesday met in Abuja with NERC and NBET officials to address issues that could militate against its eventual construction of licensed power plants in Nigeria.
Amongst the issues raised by IPPAN as part of its challenges include, inadequate gas supply to guarantee its signing of a functional Power Purchase Agreement (PPA) with NBET, the seeming unsettled capitalisation status of the NBET as well as inadequate metering facility with the sector.
Chairman of IPPAN, Prof. Jerry Gana, stated at a meeting with the regulatory authorities that its members were not fully convinced of the financial capacity of the NBET to make full payment guarantees for powers taken by distribution companies.
He said: "We are working very strongly on adequate power supply, but some issues are still pending. We still have problems with gas supply. We can't sign a PPA without gas supply.
"Please help us remove that bottleneck. There is much more to be done. The issue of NBET and guarantee for power is also not fully resolved."
IPPAN also questioned the functionality of the World Bank-enabled Partial Risk Guarantee (PRG), alleging that it was not functional.
But the Managing Director of NBET, Rumundaka Wonodi, explained that the agency had been recapitalised to make PPA payments to generation companies for up to six months on a stretch while remittances from distribution companies are taken in.
Wonodi further noted that in addition to its existing financial outlay, the agency expects to take in about $100 million as part of three months security deposits from distribution companies, $350 million from the federal government launched Eurobond and $312 million escrowed by the NCP as proceeds from the sale of Egbin power plant.
He further stated that parts of the proceeds from the sale of power plants under the National Integrated Power Projects (NIPPs) are expected to be given to it for recapitalisation, adding that the PPA framework has been tightly worked out to the benefit of the sector.
THIS DAY
Power Assets: Bidders Scramble to Meet Payment Deadline
19 Aug 2013
By Chineme Okafor
The preferred bidders selected by the National Council on Privatisation (NCP) for the five generation and 10 distribution companies created out of the unbundling of Power Holding Company of Nigeria (PHCN) are scrambling to meet the Wednesday deadline set by NCP to pay the outstanding 75 per cent of the bid price for the respective assets.
Should they miss the deadline, the bidders would have to forfeit the 25 per cent deposit that they paid six months ago while reserve bidders who are on standby will be invited by NCP to take over the assets.
In instances where reserve bids were not submitted for a few of the power assets and the preferred bidders fail to pay by Wednesday, the Bureau of Public Enterprises (BPE) may be forced to restart the process for the privatisation of the affected assets, THISDAY investigations have revealed.
Some of the preferred bidders, who spoke to THISDAY in Lagos and Abuja at the weekend, said in spite of their reservations that government had not been able to meet the conditions precedent, they have decided to pay the outstanding 75 per cent balance to avoid being in default of the Share Sale Agreement (SSA) they executed with the BPE in March this year.
Investigations by THISDAY showed that bidders most likely to pay between today and Wednesday include Amperion Power Company Limited, which won the bid for the 414MW Geregu I power plant, and is fronted by businessman Femi Otedola; Integrated Energy Distribution and Marketing Company for Ibadan and Yola distribution companies (Discos), and is fronted by the trio of the Skye Bank chairman, Tunde Ayeni, businessman, Captain Osa Okunbor and Dr. Sola Ayandele; West Power and Gas for Eko Distribution Company fronted by Lagos contractor, Dr. Tunji Olowolafe, and businessmen Charles Momoh and Ernest Orji; and NEDC/KEPCO for Ikeja distribution company, which has Sahara Energy as its local partner.
Others expected to pay include Vigeo Consortium, which won the bid for Benin distribution company, and is fronted by businessman Victor Osibodu; the trio of Transcorp/Woodrock Consortium, which won the bid for Ughelli Power Plc and is promoted by foremost entrepreneur and former managing director of United Bank for Africa Plc, Tony Elemelu; and Mainstream Energy Ltd for Kainji Power Plc, which is fronted by another major entrepreneur, Col. Sani Bello.
Opening up on their concerns, one of the bidders for the Discos confirmed to THISDAY that they decided to pay up in spite of their meeting with the Minister of Power, Prof. Chinedu Nebo, last week in Abuja where they, amongst other demands, requested an extension of the payment deadline.
He however said they and their lenders remained concerned about unresolved issues, which include the vesting contracts that were signed between the current PHCN chief executive officers of the Discos and Nigerian Bulk Electricity Trading Company Plc (NBET), otherwise known as the bulk trader, which they will inherit.
Other developments, he mentioned, included the transition market operations arrangement that would pave the way for the establishment of a Market Operator (MO) to provide for the accounting settlement system between the bulk trader and the Gencos and Discos.
The MO, he explained, is supposed to put an accounting settlement process in place and serve as the interface between market operators, but he expressed concern that the software was not yet in place.
On the labour issues, he said: "Even though government has not finished payment of the severance benefits to PHCN workers, from my point of view, it is not really a major condition precedent and I told my colleagues (other bidders) that the federal government has started paying the severance benefits of the workers starting with the Gencos. And we expect them to move on to the Discos this week."
However, another preferred bidder for one of the generation companies and who is likely to default on the payment deadline, kept insisting that the conditions precedent must be met and accused the BPE of defaulting on the terms of the agreement as contained in the SSA.
For example, he said the BPE was expected to have made it possible for lenders to gain access to the power assets they are acquiring for the lenders to conduct their own due diligence to ascertain that the assets they are providing money for are genuine.
"Unfortunately, the BPE did not create the leeway for the lenders to undertake the due diligence and because of that, some of the lenders have been reluctant to go ahead to fund the transactions.
"The reason stemmed from labour that made it clear that they will not allow anyone access to the assets except their severance package was paid by government ahead of the transfer of the assets to the bidders," he said.
Another bidder likely to default, THISDAY learnt, spent the weekend lobbying other bidders to write a letter to BPE to convince it to extend the payment deadline by 20 working days.
An email sighted by THISDAY from the bidder to his colleagues said: "I understand BPE are (sic) meeting tomorrow (Monday) to determine whether to extend the Gencos payment deadline and we are expecting extension request letters from a few of the Gencos bidders.
"As a result, …. (name of bidder withheld) needs to write a letter addressed to BPE stating that the banks need some time to disburse and we as a result are asking for a 20-working day extension period from August 21st to settle our payment to BPE…
"I am trying desperately to reach Mr. (Benjamin) Dikki (DG of BPE) on his mobile and will revert as soon I have spoken to him. In the interim, we are pressing ahead for the disbursement process to commence on Monday."When contacted on the email, sources in BPE said they were aware of the request by some bidders to extend the payment deadline but it was likely their demands would be met.
Also, Chairman of the Technical Committee of the NCP, Mr. Atedo Peterside, informed THISDAY that the bidders seeking for an extension of the payment deadline were being "clever by half".
"I personally, will not listen to any request for an extension of the deadline as the Nigerian Electricity Regulatory Commission (NERC) has made it abundantly clear that most of their concerns will be addressed once they fully pay up for the companies.
"As soon as payment is made, NERC stand ready to resolve most of the technicalities they have raised. So my advice to them is to pay up by Wednesday," Peterside said.
On concerns that Manitoba Hydro was still being frustrated from effectively running the Transmission Company of Nigeria and could affect incremental electricity output from producers, he said: "The centre of gravity of the industry has shifted to the private sector, so the federal government has no choice but to fall in line as far as TCN and the transmission grid is concerned.
"A lot of pressure will be brought to bear by private sector operators who have borrowed so much to acquire the assets and they will pressurise the federal government to allow TCN to operate efficiently."
Following the execution of the SSA and the initial payment of 25 per cent, transition committees made up of the vendor, purchasers and incumbent CEOs of the privatised companies were established for the purpose of creating a seamless transition from public to private ownership by the longstop date.
THE NATION
15 companies take over unbundled PHCN firms
Posted by: John Ofikhenua, Abuja in Featured, News 6 mins ago
The unbundling of the Power Holding Company of Nigeria (PHCN) has been completed.
Ten Distribution Companies (DISCOs) and five Generation Companies (GENCOs) have been handed the successor companies that rose from the balkanisation of the defunct PHCN.
The companies are those which completed the payment of the 75% balance on their bid price for the companies.
Minister of Power Professor Chinedu Nebo said by Wednesday night deadline, all preferred bidders had paid up, except the Enugu Distribution Company, while the preferred bidder for Sapele Power Station had made substantial part-payment."
He spoke in a statement by his media assistant Kandel Daniel.
The statement said: "The completion payment now entitles the preferred bidders to take full possession of the 15 PHCN unbundled entities (10 Distribution companies and five Generation companies)," the statement said.
Nebo described this development as a great milestone in the Power Sector Reform Roadmap that should give hope to all Nigerians, and inspire confidence in government's power reform programme and President Goodluck Jonathan's Transformation Agenda.
The Minister said he would soon formally declare open the Transition Electricity Market, to enable the investors commence business in earnest and further drive the process.
Professor Nebo also reassured Nigerians and investors of government's resolve to pursue the transformation agenda to the end, and monitor the emerging transition market, in order to protect the interest of both the citizens and the investors.
He said the stability of the national grid was being enhanced to ensure effective transmission of any quantity of power being generated in the new dispensation.
According to the Power Minister, efforts are on to provide more electricity off-grid, especially for the rural areas, while also sustaining subsidy for low income electricity consumers in the nation's tariff structure.
The new owners paid $2.238 billion.
The successful consortia are: West Power and Gas, the preferred bidder for the Eko Distribution Company; NEDC/KEPCO, Ikeja Distribution Company; 4power Consortium, Port Harcourt Distribution Company; Vigeo Consortium, Benin Distribution Company; Aura Energy, Jos Distribution Company; Kann Consortium, Abuja Distribution Company; Integrated Energy Distribution and marketing Company, the preferred bidder for the Ibadan and Yola Distribution Companies; Sahelian Power, Kano Distribution Company; Trancorp/Woodrock Consortium, Ughelli Power Plc; Mainstream Energy Limited, Kanji Power Plc; and CMEC/EUAFRIC Energy JV, which made the part-payment for the acquisition of Sapele Power Plc.
VANGUARD
PHCN: FG rakes in N358.04bn
on August 22, 2013 / in News 12:05 am / Comments
By Clara Nwachukwu & Mike Eboh
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."
- See more at: http://www.vanguardngr.com/2013/08/phcn-fg-rakes-in-n358-04bn/#sthash.gKxbA83y.dpuf
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Business Day
FG concludes power privatisation as Afam Genco, Kaduna Disco get preferred bidders
August 1, 2013 | Filed under: main story | Posted by: Editor
The Federal government on Wednesday tentatively concluded the power sector privatisation with the sale of Afam Power Generating Company and Kaduna electricity Distribution company. The two are the remaining companies that emerged from the unbundling of the Power Holding Company of Nigeria, slated for privatisation.
With a bid price of $260, 050, 000, Taleveras Group, a consortium made up of Alstom Nigeria Limited, Alstom Group, the Rivers State government and Talevaras Petroleum Trading BV, emerged the preferred bidder for Afam Power Generation Plc. This is however subject to ratification by the National Council on Privatisation (NCP).
TES Power limited, a consortium of five companies, including, China National Electric Engineering ltd, Delta Oil Company, Ancient International Infrastructure, Suburban Erst Africa Group limited, Cobra Instalaciounes Services S.A and Siemens Plc emerged the reserve bidder for Afam, with a $222,900,000 bid price.
For the Kaduna Disco, Northwest Power ltd, a consortium of ten companies, became the preferred bidder, having offered the highest Aggregate Technical Commercial and Collection loss reduction (ATC &C) figure of 29.26 percent.
In ranking, Northwest was followed by Leda Consortium ltd with 26.71 percent, NAHCO Consortium with 22.83 percent; INCAR Power ltd, 22.75 percent; Copper Belt Consortium ltd, 21.07 percent and Axis Power Distribution ltd with 17.40 percent.Also, international investors have responded with enthusiasm to the Nigerian Government's attempts to attract private investment into its independent power projects with over 100 bidders submitting Expressions of Interest to acquire majority shareholdings in the NIPP ten new thermal power plants. The combined sales could generate several billions of US dollars and would represent one of its most successful private investment projects.
According to the Niger Delta Power Holdings Company (NDPHC), 110 bids had been received by the July 19th cut-off date.
The sale process is being handled by the NDPHC, a special purpose company set up by the Government in 2005 to implement its National Integrated Power Project (NIPP) and the Bureau of Public Enterprises. The NIPP represents the Nigerian Government's flagship project that is mandated to add new generation, transmission and distribution capacity to Nigeria's electricity supply industry and resolve its chronic shortfall in supply.
At the opening of the commercial bids for the privatisation of the two companies in Abuja, Atedo Peterside, Chairman, of the Technical Committee of the NCP, said that the two companies- Taleveras Group and TES Power ltd attained the minimum 75 percent score and also submitted their post qualification security for Afam Genco.
For the Kaduna Disco, the six bidders attained the minimum 75 percent score and also submitted their post qualification security, Peterside further said.
The Kaduna Disco and Afam Genco were among the 17 PHCN successor companies that were advertised for sale in December 2010. Both companies along with 15 others, went through a full competitive tender process which culminated in the submission of technical and financial proposal in July 2012.
Peterside explained that following the rigorous technical evaluation of all the bids however, none of the bids received for Afam Power Plc and Kaduna Electricity Distribution Plc scored the minimum 75 percent required to progress to the final bid stage.
This development, according to him, compelled the NCP to order a re-run of the entire transaction, as it was not prepared to settle for sub-optimal outcome.
But in order to fast-track the process, the NCP directed that no fresh adverts would be placed, but instead, all pre-qualified bidders who had earlier expressed interest in the power privatisation, and paid the $20,000 data room fees, be allowed to participate in the exercise.
For the Afam Genco, while Telaveras won the bid, having been established as the highest bidder above the reserve price, NorthWest was selected as the core investor for Kaduna Disco, using the Aggregate Technical, Commercial and Collection (ATC&C) loss reduction strategy.
The ATC&C Strategy is a clear departure from the NCP's usual practice of awarding companies to the bidder who makes the highest financial offer, after being the technically qualified, as was done for the other ten Discos.
By: ONYINYE NWACHUKWU
THE CItIZEN
http://thecitizenng.com/governance/bpe-opens-bids-today-for-afam-kaduna-power-plants/
BPE opens bids today for Afam, Kaduna power plants
Posted by: The Citizen in Governance, Headline July 31, 2013
The 20 bidders whose bids met the guidelines for acquisition of majority stakes in Afam Power Plc and Kaduna Electricity Distribution Company will know their fate today as the Bureau for Public Enterprises (BPE) prepares to open their financial bids in Abuja.
The National Council on Privatisation (NCP) chaired by Vice-president Namadi Sambo approved a short list of bidders recently. Afam Power Plc and Kaduna Distribution Company are two of the 18 successors companies carved out of the Power Holding Company of Nigeria Plc.
The privatisation agency had last week dispatched letters to the shortlisted bidders to come for the bid opening ceremony to be held in Abuja today.
Although a total of 48 firms had expressed interest in the acquisition of majority stakes in the Afam and Kaduna power plants, 28 failed to submit their financial and technical bids by the end of the deadline.
BPE said, earlier in a statement, that as at the expiration of the Tuesday, April 16, 2013, deadline for the submission of bids by prospective investors for the Afam Power Plc and Kaduna Distribution companies, 20 prospective investors met the stipulated conditions.
According to the BPE, a breakdown showed that nine bids were received for Afam Power Plc and 11 for Kaduna Distribution Company. Chigbo Anichebe, BPE head, public communications, affirmed that the BPE had earlier set January 31, 2013, deadline for the submission of Expressions of Interest (EOIs) from prospective bidders for the two companies and received 19 applications for Kaduna Disco and 29 applications for Afam Generation Company.
It added: "Consequently, the Bureau, on February 4, 2013, sent Requests for Proposals (RFPs) to the 48 prospective bidders."
The BPE disclosed that a committee was set up to evaluate the process and came out with a report. The Afam Power Plc and Kaduna Electricity Distribution Plc were among the 18 PHCN successor companies that were earlier advertised for sale in December 2010 along with the 15 others that went through a full competitive tender process which culminated in the submission of technical and financial proposals in July 2012.
However, following the rigorous technical evaluation that all bids were subjected to, none of the bids received for Afam Power Plc and Kaduna Electricity Distribution Plc scored the minimum 75 per cent required to progress to the financial bid stage.
This development compelled the NCP to order a re-run of the entire transaction, as it was not prepared to settle for a second best.
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Enugu PHCN: Group Accuses Namadi Sambo of Determination To Ruin Igboland
By 247ureports
A non governmental organization (NGO), Oriental Renaissance Group (ORG), has advised President Goodluck Jonathan to check what it calls the excesses of Vice President Namadi Sambo in the ongoing privatization of the Enugu Electricity Distribution Company, one of the firms created out of the Power Holding Company of Nigeria (PHCN).
In a statement in Enugu today signed by the group's president, Professor Richard Enendu, and secretary, Comrade Raymond Iloh, the NGO said the vice president has "been not left anyone in doubt about his determination to hand over the Enugu Electricity Distribution Company to a consortium which has neither the financial resources nor the technical expertise to run a critical facility like the Enugu firm which is the only supplier of electricity to the Southeast geopolitical zone and environs like the Anioma part of Delta State.
"As has now been demonstrated abundantly, Interstate consortium has failed all the technical and commercial requirements, yet the National Council of privatization (NCP) headed by Vice President Sambo is ever enthusiastic to rig it in at every stage right from the time it was submitting bids .
"Last Wednesday, Interstate showed the whole world that it does not have the capacity to pay the outstanding 75% of the $126m bid prize for the Enugu Electricity Distribution Company by being the only group out of the 15 preferred bidders which could not pay the bid price of the PHCN asset it has been asked to pay.
"Like most Nigerians, we are convinced that the secret memo which the director general of the Bureau of Public Enterprises (BPE) wrote to the NCP asking for a 20-day extension for Interstate to pay for the reserved bid price was at the instance of the vice president who, from the look of things, may not mind discrediting the integrity of the entire process in order to favour his friend and business associate, Mr Emeka Offor, the controversial government contractor who is the major Interstate promoter.
"Sambo's unflinching commitment to the acquisition of the Enugu electricity firm by Interstate, it has been discovered, has less to do with the vice president's personal relationship with Offor than with his personal desire to ruin Igboland and turn it into what the great Professor Chinua Achebe would call .a lawless and bankrupt fiefdom.
"The Southeast already has the worst electricity infrastructure in the country, according to erstwhile Power Minister Segun Agagu, and to hand it over to a group led by Emeka Offor is equivalent to a death sentence. This development will finally bring the Southeast to its knees.
"The consortium does not have the humungous financial outlay to invest in the Enugu Electricity Distribution Company, which, like any other PHCN asset, is in a technical and financial mess.
"Not only has Interstate displayed technical ineptitude and financial aridity in recent times, it has also exhibited gross indiscipline and lack of seriousness.
"While 12 other bidders made full payments as of 5pm last Wednesday and two others made frantic efforts to pay, all Interstate presented to the BPE was a non committing paper from Afrexim Bank in Egypt which regards Offor as "a highly politically exposed person"..
"Yet, the BPE DG has secretly made a case that Interstate be rewarded.
"Acts like this above undermine the integrity of the privatization process and international investor confidence in Nigeria.
"The whole nation is shocked that the attempt to subvert the power privatization effort is coming just a few weeks after the bid by Notore, the company impressively running Nigeria's largest fertilizer firm at Onne in the Rivers State, for one of the 10 National Integrated Power Projects was disqualified for coming 30minutes late.
"On July 13, 2012, the same BPE rejected bids by the Dangote Group and Rockson Engineering for PHCN generation companies because they were 5 minutes late.
"To restore confidence in the privatization process and to reassure the people and governments of the Southeast that this administration is not out to ruin their future by handing over the Enugu electricity to Offor at all costs, President Jonathan is hereby called upon to call Vice Namadi Sambo to order. Let the vice president abide by rules of the game".
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