Elumelu, Otedola, others take over power generation plants

by Isi Esene

The financial bid process for the Power Holding Company of Nigeria successor Generation Companies attracted a number of notable businessmen such as Tony Elumelu, Femi Otedola and several others.

The bidding was organised by the Bureau of Public Enterprises (BPE) the privatize the generation component of the supply of electricity to the country.

With the highest bid of $300m, the Transcorp and Wood Rock consortium, led by Tony Elumelu, won the bid for the Ughelli Power Plc. Their bid beat the $252m bid presented by Amperion Power Distribution Ltd. which emerged the reserved bidder.

While speaking on the direction of its proposed investment in the power sector, Elumelu reportedly said, “Our intent is to leverage our time tested expertise in turning around businesses in growing the Ughelli Power Plant to a 1000mw generating plant by 2017.”

In a statement released by the president/CEO of Transcorp, Obinna Ufudo, the company stated its resolve to transform the power plant saying, “We are excited at this opportunity to contribute to the improvement of power generation in Nigeria while diversifying our operating entities. This is a win-win for the Nigerian public and for our 300,000 plus Nigerian shareholders. Our Consortium prepared this bid with precision, pulling together all the components necessary for the effective turnaround and doubling of the plant’s generating capacity. Our immediate plan is to deploy private sector resources to improve the output of the plant from the current 300MW to over 650MW within the first two years of our take over.”

The Amperion Group, with Femi Otedola’s Forte Oil as its main driving force, won the bid for the Geregu Power Plc. with a bid price of $132m for 51 per cent of the company’s shares.

Other members of the Amperion Consortium were BSG Power of Guersney and Shanghai Municipal Electric Power Co. Ltd/SGCC of China.

Sapele Power Plc went to CMEC/EUAFFRIC Energy with a bid price of $201million as preferred bidder.

Mainstream Energy Solutions which consists of nine companies won the bid for Kainji Power Plc at $50.760m fixed annual fee and a commencement fee of $37.8m.

Mainstream is promoted by former Kano State military governor, Colonel Sani Bello (Rtd.).

The Shiroro Power Plant was won by North-South Power rumoured to have been bankrolled by former president Ibrahim Babangida. It won the final bid round with a bid price of $23.602m fixed annual fee and a commencement fee of $111.664m.

The North-South Consortium is made up of XS Energy Ltd., BP Investment Ltd., Urban Shelter Ltd., Transatlantic Development and Investment Co., China International Water Electric, China Three Gorges Corporation, Niger State government and Roads Nigeria Plc.

According to the rules guiding the privatization process, within 15 business days of signing the Concession Agreement or Share Purchase Agreement, a bidder is required to pay 25 per cent of the purchase or concession consideration. The balance of 75 per cent must be paid within six months or at a date agreed between both parties to bring the transaction to a close.

No bid was opened for Afam Power Plc because none of the prospective investors’ technical bids got the required 75 per cent pass mark.

Chief executive officer of the Nigeria Electricity Regulatory Commission (NERC), Sam Amadi, commended the transparency of the process and encouraged the companies to conclude the acquisition process with a view to kickstarting the business of power generation.

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