19 August 2013 – August 21st 2013 is the day that was set aside for the payment of the remaining 75% of the bid sums for 15 generation and distribution assets of the Power Holding Company of Nigeria (PHCN) by the 14 buyers. The country is expected to realise about US$2.5 billion from this final phase of the exercise that began February 2013.
According to one analyst, who spoke with BusinessDay that filed a report on the topic, the success of the exercise will bring renewed focus on how Nigeria’s electricity sector is regulated as well as on the regulators themselves.
“It also means that the distribution and generation companies will be under constant scrutiny for performance. All of these will potentially have a great influence on the direction of the country’s economy in the long run.”
The August 21 deadline for the payment of the balance is in line with the agreement with the bidders, which require them to pay up six months after the payment of initial 25% of the value paid on the 21st of February 2013.
Sam Amadi, chairman, Nigerian Electricity Regulatory Commission (NERC), confirmed that the original deadline for the payment was August 21.
Bidders have been working hard to ensure they have the funding available to meet the deadline. The payment of the balance of the offer value by the buyers of the assets would lead to the conclusion of the first round of the Nigerian federal government’s privatisation of power generation and distribution assets and the handover of the assets to the investors.
It is expected that completion of the payment and the handover of the plants will bring about higher generation capacities through the provision of more efficient and cost effective power stations and improvements in the distribution sector in the areas of billing and collection, and distribution networks.
The Bureau of Public Enterprises in March 2013 disclosed that 14 bidders for the 15 PHCN firms paid a total US$559.446 million to the government, covering the 25% of the bids value for the successor companies.
The distribution companies and preferred bidders are Abuja distribution company, Kann Consortium; Benin distribution company, Vigeo Power Consortium; Eko distribution company, West Power and Gas; Enugu distribution company, Interstate Electrics; Ibadan distribution company, Integrated Energy Distribution and Marketing; Ikeja distribution company, NEDC/Kepco Consortium; Jos distribution company, Aura Energy; Kano distribution company, Sahelian Power; Port Harcourt distribution company, 4Power Consortium, and Yola distribution company, Integrated Energy Distribution and Marketing.
For the power generation companies, North-South Power, Shiroro hydropower; Mainstream Energy Solutions for Kainji hydropower; CMEC/Eurafric Energy for Sapele power company; Amperion Power Distribution for Geregu power company; and Transcorp Consortium for Ughelli power company.