To boost electricity supply in the
country, the Africa Finance Corporation (AFC) in conjunction with UBA Bank Plc,
as co-arrangers, and FCMB and Fidelity Bank as co-financiers has provided a N13
billion debt financing facility for the acquisition of Ughelli Power Plc.
The aggregate commitment of AFC for the acquisition is N8 billion.
Meanwhile, there is intense lobby at
the Bureau of Public Enterprises (BPE) to extend the payment deadline for Enugu
Electricity Distribution Company, which could not be paid for when the deadline
ended on Wednesday.
In a related development, Eastern
Electric, the reserve bidder for Enugu Electric Distribution Company, has made
overtures to the BPE to respect the law and immediately allow it make payment
following the inability of the preferred bidder to meet up.
Besides, an indigenous firm - Forte
Oil Plc, said Sunday that its subsidiary, Amperion Power Distribution Company
Limited (Amperion Power) has completed the acquisition of a majority stake in
the 414MW Geregu Power plant with payment of $99 million. Nigeria began restructuring and
reform of its electricity sector in 2000 with the issuance of the National
Electric Power Policy (NEPP) to unbundle the sector and establish a regulator,
with a mandate to create and develop a competitive electricity market.
The provisions of the NEPP were
subsequently enacted in the Electric Power Sector Reform Act
2005 (EPSR Act), providing the key legal and regulatory framework for the
reform, including the establishment of the Nigeria Electricity Regulatory
Commission (NERC), paving the way for private sector participation in the power
sector.
Ughelli Power Plc is one of six power
generation limited liability companies established under the provisions of the
EPSR Act following the unbundling of the vertically integrated
PHCN. Ughelli Power Plc is a gas fired
thermal power plant acquired by Transnational Corporation of Nigeria Plc
(Transcorp) in the first round of the Federal Government of Nigeria’s
privatisation of power generation assets formerly owned by the Power Holding
Company of Nigeria (PHCN). Ughelli Power Plc was incorporated in 2005, is situated
in Delta State and has an installed capacity of approximately 900MW. It
currently generates approximately eight per cent of the total electricity
within the Nigerian national grid.
Transcorp is the lead sponsor in the
Transcorp Ughelli Power consortium, which will be purchasing 100 per cent of
the shares in Ughelli Power Plc. Transcorp, incorporated in 2004, is a
diversified conglomerate with strategic investments and core interests in the
hospitality, agribusiness and energy sectors.
AFC, a multilateral finance
institution, was established in 2007 and has a current capital base of US$1.2
billion. It was established to be the catalyst for private sector
infrastructure investment across Africa. AFC fills a critical void in
providing project structuring expertise and risk capital to address Africa’s
infrastructure development needs, and is increasingly being seen as the
benchmark institution for private sector investment in the core infrastructure
sectors of power, natural resources, heavy industry, transport, and
telecommunications. President and Chief Executive Officer
of the AFC, Andrew Alli stated: “AFC’s long-term vision is to help address
Africa’s infrastructure deficit and ensure sustainable economic growth for the
continent. Growth of the Nigerian economy cannot be fully realised
without an efficient and functioning power sector. Power is one of AFC’s high
priority sectors for investment, and arguably Africa’s most significant need. To this end, AFC stands as both an
advocate and support of privatisation of the power sector in Nigeria, and has
partnered with the U.S. government through United States International
Development Agency (USAID) in the USD7 billion U.S. Presidential “Power Africa
Initiative” to accelerate investment in Africa’s power sector over the next
five years and increase access to clean, geothermal, hydro, wind and solar
energy. AFC’s investment in Ughelli power will contribute towards
reducing Nigeria’s chronic power deficit, foster economic growth and create employment.
AFC was created to address the
infrastructure investment deficit and is privileged to be providing an African
private sector investment solution, to drive economic growth and industrial
development in Nigeria.”
At the close of the official deadline
on Wednesday, all the preferred bidders for the nation’s utilities for
privatisation had paid up except Interstate Electrics, which was unable to pay
the remaining 75 per cent of the bid price for Enugu Electricity Distribution
Company.
Information released from Ministry of
Power indicates that apart from the preferred bidder for Enugu Disco which
failed to make payment that of Sapele Power Station had made ‘substantial
part-payment’. It is not immediately clear if ‘substantial part-payment’ also
qualifies as beating the deadline. Spirited attempts to get Vice President Namadi Sambo, who is
the chairman of the National Council on Privatisation, to make a special case
for Interstate Electrics were unsuccessful. A source said the promoters of the
defaulting firm have been told in clear terms that international
development partners like the USAID and the Department of
International Development (DFID) of the British government, which are
involved in the bid process as observers, would not accept it. “This was why the bids from Dangote
and Rockson Engineering for two generation firms were disallowed in July, last
year; both bids arrived only a few minutes late.
Interstate Electric was also given
the example of Mike Adenuga, who could not be awarded a GSM licence in 2001
when MTN, NITEL and Airtel received theirs because of a mistake,” Meanwhile, Minister of Power, Prof.
Chinedu Nebo is getting set to formally declare the Transition Electricity
Market, to enable the new investors commence business in earnest and further
drive the process. He said in Abuja, “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).”
Nebo reassured 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 citizenry 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. He said efforts were also 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
promoters of the consortium have gotten their lawyer to formally write BPE on
the need not to drag the privatisation process into unnecessary litigations.
Eastern Electric had on
Wednesday declared preparedness to pay $126 million for the takeover of the
company which provides power to the southeastern part of Nigeria, following the
failure of Interstellar Electric to do so. The consortium was formed by the five
Southeast state governments: Nestoil, a major indigenous operator in the
upstream sector of the Nigerian petroleum industry; Aba Power Ltd and Geometric
Power Ltd, and Diamond Bank and members including NRECA of the United States
and the NETGroup of South Africa.
The firm’s statement read: “We shall
not have difficulty raising the funds. The BPE is still holding on to our $10
million bank bond raised when we were bidding for the Enugu Disco.”
The BPE had on Monday announced
that it would not extend the Wednesday deadline for the payment of the
outstanding 75 per cent of the bid prices for successor companies of the Power
Holding Company of Nigeria by the preferred bidders. BPE said if they failed to pay by 5
p.m. last Wednesday, they would lose the bids, while the reserved bidders would
be invited to take over the assets.
A source at the BPE said that the agency has to give some period of grace to Interstate Electric Limited
to make payment and also to CMEC/EUAFRIC Energy JV, the preferred bidder for
Sapele Power Plc, which had earlier paid a substantial amount of the 75 per
cent balance.
Interstates, which is promoted by
businessman, Emeka Offor, was preferred to acquire the Enugu Disco and like
others, it had initially paid the mandatory 25 per cent bid price but was
unable to meet up with the 75 per cent balance at the expiration of the deadline
set by the BPE.
Also, a source in the Interstate who
spoke in confidence said: “We are making frantic efforts
to ensure that we make the payment in the next few hours. There is still
hope for Interstate Electric Limited to take over the Enugu Distribution
Company. Though, the BPE gave us up till Friday, August 24 to make the
final payment, we were not able to pay. But I assure you that in the next
24 hours, the company would have fully paid for the power firm”, he said. A source in BPE confirmed that the agency was trying to relax the rule contained in the Request
for Proposal (RFP) to give opportunity for Interstate Electric Limited pay
their outstanding balance.
Head, Brand and Corporate
Communications, Odion Aleobua, said in a statement yesterday, that Amperion
Power completed the acquisition of the power plant ahead of the Wednesday,
August 21, 2013 deadline with the payment of $99 million to the BPE
representing 75 per cent balance for the power generation asset.
This, the company said was in
addition to the $33 million mandatory down payment made on February 21, 2013 to
the BPE by the group to complete the required bid sum of $132 million.
No comments:
Post a Comment