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When power sector reform attained new milestone

From November 1st when the Federal Government of Nigeria handed over the Power Holding Company of Nigeria {PHCN}, there has has been a surge and massive interest globally in the power sector of Nigeria. The sector has become the new “oil boom.”

The week witnessed a flurry of activities, a surge in sector reform witnessing the sale of ten power plants to private investors. This is coming as new Minister of State  for Power, Honourable Mohammed Wakil hit the ground running by meeting several stakeholders in the power sector. The ministers and the management of the ministry  were elated and eager to flaunt the well acknowledged transparency in the sales of the nation’s power assets, as well as gradual improvement in the power supply management in the country.

The Minister of Power , Professor Chinedu Nebo, said that the appetite for power in Nigeria was so huge and that if 16,000.mw was produced today, the country would still ask for more.The minister stated this while receiving the World Bank and Key Global firm which  have jointly agreed to invest $1billion in the Azura Edo Independent Power Plant, which will generate 450 megawatts{mw}.Nebo reiterated that Nigeria was looking forward to producing 40,000 .mw by 2020.

He, however,  added that no investor would invest in Nigeria without getting their investments covered.The right environment he said has been provided alongside requisite legal framework that guarantees safety of investment and  necessary returns.

As a manifestation of that growing international investors’s confidence, the Federal Government received financial bids of 80% of 10 National Integrated Power Plants which provided the government with $5.8billion. The Director-General, Bureau of Public Enterprise, Mr Benjamin Dikki, who confirmed the development said that the National Council on Privatisation and the Board of Niger Delta Power Holding Company would soon meet to approve the bid process before the payment. He said, “25 per cent of the total cost of a plant must be paid within 10 days and the balance paid in six months,adding “that will be after the approval of the NCP and the NDPHC board.”

Earlier, the Chairman of the NCP, Mr Atedo Peterside, who supervised the bidding, assured investors of transparency. Peterside announced the preferred bidder and reserved bidder for each of the 10 power plants according to the highest bids submitted by the investors. He said the process was done in line with international best practice.

Peterside said ALTEO Consortium was the only company that bid for Alaoji Gence with 902 million dollars to emerge the winner. He noted that only 80 per cent of shares in each of the power generating companies was up for sale. The NCP chairman added that government would retain 20 per cent of its share holdings in these companies.

He said: “For Benin Genco, EMA Consortium is the preferred bidder with a bid opening of $580 million, while Index Consortium is the reserved bidder with a $575 million bid. Calabar Genco has EMA Consortium as preferred bidder with a bid of 625 million dollars and Nebula Power Generation Consortium as reserved bidder with a $623 million bid. ALTEO Consortium emerged as the preferred bidder for Egbema Genco in Imo State with a $392 million bid and Dozzy Integrated Power Ltd as reserved bidder with $415 million bid.”

Peterside said for Gbarain Genco (Bayelsa), there were six bidders with KDI Energy Resources and Azikel Power Ltd emerging as Preferred and Reserved bidders respectively.He explained that KDI Energy Resources made a bid of $340 million and Azikel Power Ltd, $305 million to win the bid.He said Geregu Genco (Kogi) has Seoul Electric Power Limited  as preferred bidder with a $690 million bid and Yellow Stone Electric Ltd as a reserve bidder with $613 million bid. Daniel Power Consortium emerged the preferred bidder for Ogorode Genco (Delta) with a $531 million bid, while ESOP Power Ltd was the reserved bidder with $510 million bid. Olorunsogo (Ogun) Genco initially had five bidders but ALTEO Consortium pulled out and would therefore pay a fine of four million dollars as penalty.

So for Olorunsogo, ENL Consortium was the preferred bidder with $751 million bid and Index Consortium emerged the reserved bidder with $730 million bid. Peterside said Shayobe International Ltd Consortium emerged the preferred bidder for Omoku Genco in Rivers with a $318 million bid, while ALTEO Consortium emerged as reserved bidder with a $312.5 million bid.The NCP boss said Omotosho Genco in Ondo State had the highest number of nine bidders, with Omotosho Electric Power emerging as preferred bidder with a $659 million bid and ENL Consortium as reserved bidder with $645 million bid.

Earlier, the Chairman of the Joint Technical Transaction Committee, Mr Gabriel Suswam, had expressed delight at the successful conduct of the bid. He said: “All the plants are in good condition; the investors who bid for the plants have done their own due diligence and inspection of the plants before submitting their bids.’’

The Managing Director, NDPHC, Mr James Olotu, said that with the privatisation of the GENCOS, the power situation in the country would improve significantly.It was reported that sixty-five companies initially applied to bid for the 80 per cent equity in the ten power plants. However,only forty two companies were approved to take part in the exercise.The ten power plants have a combined capacity of 5,034MW.The plants for sale include Olorunsogo Power Plant (phase 2), Ogorode GENCO, Gbarain Power Plant, Alaoji Power Plant, Benin GENCO, Calabar GENCO and Egbema Power Plant.Others are the Geregu Power Plant, Omotosho Power Plant and the Omoku power plant.

Meanwhile,the Japanese International Co-operation Agency (JICA) has concluded plans to fund solar powered plant, to the tune of $10million that will provide electricity for the treatment of water at the Lower Usman Dam in Bwari Area Council of the FCT. Speaking on the project, the newly appointed Minister of State (Power), Hon. Mohammed Wakil stated that the project when completed would help in solving the problem of epileptic power supply,

The minister assured JICA that Nigeria would make good use of the project . He further commended the company for the lead in rural electrification in his home State Borno, adding that JICA has demonstrated firm commitment to complement efforts of the Nigerian Government in critical areas. The Permanent Secretary of the Ministry of Power, Ambassador (Dr.) Godknows Igali, said that the project was dear to the Nigerians, because of its operational efficiency for the treatment plant and as it would make power available to the people in the area.

He said renewable energy holds the greatest value to humanity, as the raw material was available in abundance,stating that the project had shown that it is possible to harness God given gift for the benefit of Nigerians. The permanent secretary  said that JICA had also done well for Nigeria in the area of rural electrification, water resources and environment. Infact,  the agency has done superlatively well in training Nigerian technicians that would man the solar plant when completed,” he said.

Culled from :Here

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