Thirteen of the preferred bidders for successor generation and distribution companies created from the unbundling of Power Holding Company of Nigeria (PHCN) have finally paid up their 75 per cent outstanding balance of bid prices for their acquired assets to beat the payment deadline, which expired Wednesday.
Three of the bidders, West Power and Gas, Integrated Energy Distribution and Marketing Company and Amperion Power Company Limited, were the first to beat the deadline, as exclusively reported by THISDAY Wednesday.
While West Power, the preferred bidder for Eko Distribution Company (Disco) Plc and Integrated Energy, for both Ibadan and Yola Distribution Companies paid up the 75 per cent balance for the distribution and generation companies being sold to investors through the privatisation process, Amperion made a part-payment of $45.16 million (N7 billion) for the 414 megawatts (MW) Geregu I thermal power station. By yesterday, it had paid the balance.
THISDAY checks revealed yesterday that 10 more bidders met their financial obligations under the privatisation of the power sector while one of the bidders made part-payment to meet up with the final payment deadline set by the Bureau of Public Enterprises (BPE), which is superintending the privatisation process.
Also yesterday, the Independent Power Producers Association of Nigeria (IPPAN) met with the Nigeria Electricity Regulatory Commission (NERC) and Nigeria Bulk Electricity Trading Company Plc (NBET) to address issues that could militate against its eventual construction of licensed power plants in Nigeria.
It was gathered that the preferred bidders who had fully met the payment deadline as at the expiration of the 5pm deadline yesterday included NEDC/KEPCO, the preferred bidder for Ikeja Distribution Company; Vigeo Consortium, for Benin Distribution Company; 4 Power Consortium for Port Harcourt Distribution Company; Aura Energy for Jos Distribution Company; Kann Consortium for Abuja Distribution Company and Sahelian Power for Kano Distribution Company.
Also, Transcorp/Woodrock Consortium, the preferred bidder for Ughelli Power Plc; Mainstream Energy Ltd, the preferred bidder for Kainji Power Plc; Amperion for Geregu, KEPCO for Egbin and CMEC/EUAFRIC Energy JV, which made part-payments for the acquisition of Sapele Power Plc, have met the deadline.
Following the 75 per cent payment earlier made on Tuesday by West Power and Gas and Integrated Energy Distribution and Marketing Company for Eko, Ibadan and Yola distribution companies respectively, THISDAY gathered yesterday in Abuja that the BPE had as at press time confirmed the payments made by these bidders.
However, Interstate, which is the preferred bidder for Enugu Distribution Company and North-South Power Company, for Shiroro Power Plc, might have missed the deadline for the payment of the 75 per cent balance because as at the 5pm deadline, their payments, if any, had not been confirmed.
The privatisation agency had insisted that it would not grant the request for extension of deadline for the payment of the 75 per cent outstanding balance by the preferred bidders of the various generation and distribution companies.
Following the rejection of the request, the BPE had from Tuesday begun to take in payments from some of the preferred bidders, starting with West Power and Gas, which paid $101.25 million as being full and final payment for the acquisition of Eko Disco as well as Integrated Energy Distribution and Marketing Company, which was said to have paid $160 million for the acquisition of Ibadan and Yola Discos.
Sources close to the transaction stated that Vigeo paid $96.75 million for Benin Disco, being 75 per cent of its outstanding balance to acquire 60 per cent of the stake in the utility company, while NEDC/KEPCO paid $407 million as full and final payment for its interest in Egbin Power Station.
NEDC/KEPCO also paid its 75 per cent outstanding balance for its acquisition of Ikeja Discos, which is $101 million; it had initially paid $33.75 million six months ago, being its initial deposit of 25 per cent for its acquisition.
The duo of Transcorp/Woodrock Consortium and Mainstream Energy Ltd was also confirmed to have made payments to beat the deadline.
In line with the privatisation transaction schedule and guidelines, it is expected that any of the preferred bidders that missed the payment deadline will automatically forfeit its initial 25 per cent deposit for its respective assets while at the same time losing its preferred bidder’s status in the process.
Some of the bidders had last week started to drag their feet in the hope that the payment deadline would be extended by NCP, which alongside the BPE eventually dashed their hopes on Monday when they both insisted that the August 21 payment deadline remained sacrosanct as stipulated in the Request for Proposals (RFPs).
The bidders had expressed concern that the federal government had not been able to meet the conditions precedent that would give their lenders comfort to finance the acquisitions.
Meanwhile, Eastern Electric Company, the reserve bidder for the Enugu Electricity Distribution Company, has declared its preparedness to pay $126 million for the takeover of the company, which provides power to the South-eastern part of the country.
The company expressed its willingness in a statement Wednesday by its communication consultant, Mr C. Don Adinuba, following the inability of Interstate Electrics to pay the remaining 75 per cent of the bid price at the close of payment Wednesday.
The consortium was formed by the five South-east state governments; Nestoil, a major indigenous operator in the upstream sector of the petroleum industry; Aba Power Ltd and Geometric Power Ltd, led by former Power Minister Bart Nnaji and Diamond Bank’s founding chairman Pascal Dozie, among others.
“We have a robust and matchless combination of global best practices and the best experience of emerging economies.
“We shall not have difficulty raising the funds. The Bureau of Public Enterprises is still holding on to our $10m bank bond raised when we were bidding for the Enugu Disco.
“As all Nigerians must have known, the 141MW Aba integrated power project built by Geometric Power and which cost over $450 million is about to be commissioned,” the statement said.
In a related development, IPPAN Wednesday met in Abuja with NERC and NBET officials to address issues that could militate against its eventual construction of licensed power plants in Nigeria.
Amongst the issues raised by IPPAN as part of its challenges include, inadequate gas supply to guarantee its signing of a functional Power Purchase Agreement (PPA) with NBET, the seeming unsettled capitalisation status of the NBET as well as inadequate metering facility with the sector.
Chairman of IPPAN, Prof. Jerry Gana, stated at a meeting with the regulatory authorities that its members were not fully convinced of the financial capacity of the NBET to make full payment guarantees for powers taken by distribution companies.
He said: “We are working very strongly on adequate power supply, but some issues are still pending. We still have problems with gas supply. We can’t sign a PPA without gas supply.
“Please help us remove that bottleneck. There is much more to be done. The issue of NBET and guarantee for power is also not fully resolved.”
IPPAN also questioned the functionality of the World Bank-enabled Partial Risk Guarantee (PRG), alleging that it was not functional.
But the Managing Director of NBET, Rumundaka Wonodi, explained that the agency had been recapitalised to make PPA payments to generation companies for up to six months on a stretch while remittances from distribution companies are taken in.
Wonodi further noted that in addition to its existing financial outlay, the agency expects to take in about $100 million as part of three months security deposits from distribution companies, $350 million from the federal government launched Eurobond and $312 million escrowed by the NCP as proceeds from the sale of Egbin power plant.
He further stated that parts of the proceeds from the sale of power plants under the National Integrated Power Projects (NIPPs) are expected to be given to it for recapitalisation, adding that the PPA framework has been tightly worked out to the benefit of the sector.
Information from This Day was used in this report.