Investors in PHCN firms to face $100m hurdle for NIPP plants

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Investors in any of the successor companies of now privatised Power Holding Companies of Nigeria (PHCN) are to face extra financial hurdles of $100 million to emerge preferred bidders for any of the 10 National Integrated Power Projects (NIPP) whose bids closed last Friday.

The fresh huddles were revealed on Monday at the opening of technical, financial and bond bids of the NIPP plants owned by the Niger Delta Power Holding Company (NDPHC) in Abuja.

Managing Director of NDPHC, James Olotu explained that the extra burden placed on the winners of any of the PHCN companies is to ensure that the old companies are not abandoned for the new ones.

According to him, “Look at it this way, a company bids for the power generation plants, in our guidelines you must have a net worth of a certain amount of money ranging between $100 million to $250 million. Now if a company has already won a power plant before or one of the distribution companies before, and is now attempting to purchase another one, it is allowed under the rules. But we want to make sure the promises and the conditions for winning the first one are not in any way compromised.

“You know the last phased transaction was with old power plants and these plants, we are not going to throw them away. We want them to be reactivated, expanded and brought back to life to the capacity they were before or expanded to a bigger capacity.

“Now if a man now agrees to this programme and suddenly the man now wins this new power plants, he abandons that one and diverts the money he want to invest into the old one to the new one. That is short changing Nigeria.

“So we make sure that first, the person has the financial capability he claimed he had before he was declared the preferred winner of the transaction. We will add that to the financial capability we believe he should have before also winning this transaction.

“So that ultimately we do not sell a new power plant to somebody who will lose interest in the old power plant that he has acquired”.

Olotu who also explained the process of acquiring the NIPP plants, noted that “the evaluation committee has been set up and they start working from today for a minimum of two weeks, if they need more time, we will give them but the target is that within the next two weeks they will be doing the evaluation.

 

[Daily Independent]

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