HomeIndustry SectorsGenerationNigeria's final PHCN generation and distribution privatisation bid winners announced

Nigeria’s final PHCN generation and distribution privatisation bid winners announced

5 August 2013 – The privatisation programme of Nigeria’s power sector took another step forward with the Taleveras group named as the preferred bidder for the Afam power generation facility. It offered US$260 million for the asset, with TES Power’s US$223 million bid qualifying that group as the reserve bidder.

Nigeria’s National Council on Privatisation (NCP) had suspended bids for Afam after it was revealed that the former power minister, Bart Nnaji, had links with one of the consortia which had submitted bids for the plant.

The winning bid for the Kaduna distribution company was Northwest Power with an aggregate technical, commercial and collection loss reduction proposal of 29.26%. The second place and reserve bidder was the LEDA Consortium that offered an aggregate technical, commercial and collection 26.71% to take second place as the reserve bidder. A third bidder, the Incar Consortium offered 22.73%. The bidders for this distribution company were selected using these proposals because of the urgent need to reduce losses and create a self-sustaining electricity market. The previous round of bidding on the privatisation of the Kaduna distribution company was adjudged inconclusive, as none of the prior bidders met the technical qualification criteria.

The regulator will not adjust tariffs upwards to accommodate the inability of a distribution company operator to deliver on the agreed upon technical, commercial and collection losses. Instead tariffs will be adjusted downwards annually to reflect the agreed loss levels irrespective of the operator’s ability to meet his contractual obligation.

The naming of the bidders for these two assets means that the bid process for the 17 Power Holding Company of Nigeria (PHCN) successor companies that were advertised for sale in December 2010 by the National Council on Privatisation (NCP) and Bureau of Public Enterprises (BPE) is reaching conclusion. Earlier bidding rounds saw winning bidders named for five generation assets and 10 distribution companies.