A total of 331
applications were received as at March 4, 2011, being the deadline for
the submission of Expressions of Interest (EOIs) in the privatisation
of the successor companies created out of the Power Holding Company of
Nigeria (PHCN) according to the Bureau of Public Enterprises (BPE).
“One hundred and
seventy four applications were received from prospective
investors/concessionaires interested in acquiring the four thermal
stations and the two hydro stations. One hundred and fifty-seven
applications were harvested from prospective investors interested in
acquiring the 11 distribution companies,” the BPE said in a press
statement on its website.
The Bureau for
Public Enterprises (BPE), the country’s privatisation agency, said 174
applications were received for the four thermal and two hydro power
stations, while 157 applications were received for the 11 distribution
firms. Goodluck Jonathan, Nigeria’s president, who faces an election in
April, has made ending persistent power shortages in Nigeria, as one of
the major points of his administration, especially with the roadmap on
the power sector reforms launched last year. Electricity shortages are
a challenge for growth in Nigeria, the second-biggest economy in
sub-Saharan Africa and the potential returns for investors in the
country are enormous.
The BPE, had
between December 13 and 20, 2010, published adverts in local and
foreign media inviting prospective core investors to express interest
in the 11 distribution companies unbundled from the Power Holding
Company of Nigeria (PHCN.) It also invited prospective core investors
to express interest in the four thermal power stations and as
concessionaires for the two hydro power stations. The initial deadline
for receipt of EOIs was Friday,
February 18, 2011.
“But following
representations by prospective investors who attended the five-city
Electric Power Investors’ Forum which was to court world class
investors to participate in the privatization of the successor
companies,
the federal
government approved the extension of the deadline for the submission of
EOIs to Friday, March 4, 2011. The approval was granted by the chairman
of the National Council on Privatization (NCP), vice president Mohammed
Namadi Sambo. The fora were held in Lagos (January 18-19, 2011); Dubai
(January 24-25); London (January 27-28); New York (February 1-2); and
Johannesburg (February 10-11.),” the report stated.
Breaking the monopoly
Chukwuma Nwoko, BPE
spokesperson said in addition to the offer of a minimum of 51 per cent
of the companies, bidders were expected to submit proposals that
reflect information on their strategy for meeting the efficiency
targets that will be specified in the Request for Proposals.
“Care will be
taken, by working closely with NERC, to ensure that a monopoly or
oligopoly of market power in the generation sector is not acquired
through these divestitures. The competitive bulk procurement of
electricity by the Bulk Trader; and the bilateral contracting of
electricity between generating and distributing companies — all
overseen by a fully-empowered independent sector regulator through the
Multi Year Tariff Order (MYTO) mechanism — are the key guarantors that
electricity will be generated into the grid on a competitive,
commercial and consumer-oriented basis,” he said.
The core investor sales to be carried out through international
competitive bidding will cover the eleven electricity distribution
companies in the country. They are 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.
