Privatized Power Assets: Who Are The New Owners?

New-owners-of-power-assets-360x225

New-owners-of-power-assets-360x225Out of the eighteen original unbundled PHCN firms fixed for privatisation, fifteen have now been confirmed with the receipt of take over documents and the physical hand over of assets while three are still pending. Two out of the three, the Afam generating company (GENCO) and the Kaduna distribution company (DISCO); will collect their documents at a later date. With the preferred bidder for the Afam GENCO expected to pay a total of $260m within 6 months, based on a different time-table and the preferred bidder for the Kaduna DISCO, which also has a separate time-table, expected to pay a total of $163m within 6 months. The third, which is the Sapele GENCO, has preferred bidders who have been given an extra three months to complete payment of the balance of $21million of the total bided price of $201million. The preferred bidders; CMEC/Eurafric Limited had paid a total of $180 million, but asked the NCP for more time to complete payment after the reserved bidder, Nestle oil/Julius Berger bided $106 million for the Sapele power firm. In total the potential proceeds from the sale of the DISCOs once the final Kaduna DISCO is paid for will amount to $1.419bn while the potential proceeds from the sale of the GENCOs (including Afam and Sapele) should amount to $1.65bn (best case) or $1.55bn (worst case scenario). (As I noted in my earlier e-mail, we can do away with this paragraph, provided we can use a picture of some of the owners)

The physical hand over of ownership of the unbundled PHCN assets to the new owners of five GENCOS and ten DISCOS by President Goodluck Jonathan on November 1st has no doubt heralded a new dawn in the power sector. However, the take-over of the assets has also raised new questions as to the credibility of the companies behind the purchases and as to whether they will be able to deliver in terms of adequate technical expertise and manpower, handling of capacity, as well as the delivery of quality services across their various jurisdictions.

 

The GENCO Investors

Transcorp/Woodrock Consortium

Asset: Ughelli Power Plant

Cost: $300 million

Key Individuals: Mr. Tony Elumelu (Chairman, Transcorp Group), Mr. Obinna Ufudo (CEO, Transcorp Group) Mr. Adeoye Fadeyibi (CEO, Transcorp Ughelli Power Limited)

Summary: The Ughelli power plant with an installed capacity of 972 MW was acquired by the Transcorp/Woodrock Consortium through a debt financing facility arranged by African Finance Corporation (AFC), United Bank for Africa Plc (UBA), First City Monument Bank (FCMB) and Fidelity Bank. Mr. Tony Elumelu, a former CEO of UBA played a major role in the deal through his company Heirs Holdings Ltd. Mr. Elumelu had a stellar track record as a banker during his time as CEO at UBA and since his retirement in 2010, his brain child; Heirs Holdings has been promoting businesses, especially small and medium scale enterprises across Africa.

Transcorp Ughelli Power Limited (TUPL), which also has Wood Rock Energy Resources Limited, Symbion Power LLC, Thomassen Holding Limited, Medea Development SA, Tenoil Petroleum and Energy Services Limited and PSL Engineering and Control Limited as equity investors/partners, plans to immediately carry out a three-phase operation of “quick wins, refurbishment and expansion.” These involve activities that will immediately address the shortage in available capacity and increase the power generation capacity of the plant from 300 MW to over 1500 MW in the next five years.

 

Amperion Power Distribution Limited

Asset: Geregu Power Plant

Cost: $132 million

Key Individuals: Mr. Femi Otedola (Chairman, Forte Oil), Mr. Akin Akinfemiwa (CEO, Forte Oil)

Summary: The acquisition of the Geregu power plant, with an installed capacity of 414 MW was spear headed by Mr. Femi Otedola, who is also the chairman of Amperion’s parent company Forte Oil. Forte Oil owns 57% of Amperion’s equity, while its technical partners BSG Resources Limited; a global diversified energy group owns 38% and the Shanghai Municipal Electric Power Company (SMEPC); the world’s largest power company has a 5% stake.

Mr. Otedola, a business man of many concerns is widely recognized as a stalwart in the downstream petroleum sector, through his affiliations with Zenon Petroleum and Gas Limited and subsequently, Forte Oil. According to the CEO of Forte Oil, Mr Akinfemiwa, the move into power is part of the company’s transformation programme which includes its diversification into other high margin energy sectors such as power generation and upstream exploration and production. Amperion Power, utilizing the strengths of its technical partners has stated that it intends to ramp up the capacity of the plant by about 50% to over 600 MW in the short to medium term.

 

Mainstream Energy Solutions Limited

Asset: Kainji Hydro Electric Plant and Jebba Hydro Station

Cost: $170 million

Key Individuals: Col. Sani Bello (Chairman, Mainstream), Alhaji Ismaila Isa (Vice Chairman, Mainstream), Brig Gen. Tunde Ogbeha (Director, Mainstream)

Summary: The Kainji and Jebba power stations both owned by Kainji Hydro Electric Plc was part funded by a medium term syndicated acquisition facility. The syndication was funded by Guaranty Trust Bank (GTB) and Africa Finance Corporation (AFC).

Col. Sani Bello (rtd) is the spearhead of Mainstream Energy Solutions Limited (MESL) and is a former military administrator of Kano state. He has also been either chairman or director of several companies including MTN, Law Union & Rock Insurance Plc and Amni Petroleum. The consortium of companies which have equity interests in MESL include; Allstream Energy Solutions, Amni International Petroleum Development Company, Anchorage Holdings Limited, Bullet International, Conexel Nigeria Limited, Confluence Cable Network (“CCN”) and Crust Energy.

MESL also has a technical partner in the form of Russian company, RusHydro Group which has significant hydro power experience across Russia and several bi-lateral relationships in Asia and Europe. MESL has restated that its focus is to sustain the current capacity and meet the five-year target of 1500 MW as contained in the terms of concession for Jebba and Kainji hydro companies. It recently added another unit to the Jebba hydro station, increasing the plant’s capacity from 380 MW to 450 MW

 

North South Power Company Limited

Asset: Shiroro Power Station

Cost: $111.7 million

Key Individuals: Eng. Olubunmi Peters (Vice Chairman, North South Power)

Summary: North South Power Company Limited acquired the 600MW capacity Shiroro power station with the help of a successfully arranged debt financing deal by UBA, which acted as the financial adviser and mandated lead arranger of the transaction.

Former military head of state, General Ibrahim Babangida has been strongly linked to North South Power as its primary promoter; however representatives of the company have vehemently denied this. The “official” members of the consortium behind North South Power include; XS Energy Limited, BP Investment Limited, Urban Shelter Limited, Transatlantic Development and Investment Company, Roads Nigeria Plc (Nigeria) and Niger State Government. The consortium is also backed by their technical partners, China International Water Electric and China Three Gorges Corporation.

The company’s vice chairman Engineer Olubunmi Peters has indicated that North South Power intends to add 600 MW into the national grid and then add 200 MW in its third year.

 

KEPCO Energy Resources Limited

Asset: Egbin Power Station

Cost: $407.3 million

Key Individuals: Mr. Tonye Cole (CEO, Sahara Energy Group), Mr. Tope Shonubi (Executive Director, Sahara Energy Group)

Summary: KEPCO Energy Resources, a joint venture between Korea Electric Power Corporation (KEPCO), a South Korean power company with assets across the globe and Nigeria’s Sahara Energy Group; had in 2007 acquired a 51% equity stake in the 1,320 MW capacity plant at a cost of $280 million, as part of the ongoing privatisation process of the country’s ailing power sector by the Federal Government.  However, due to several challenges, the handover of the plant to KEPCO was delayed for over 6 years. KEPCO was then offered additional 19% shares in 2013 through a supplemental share purchase agreement, thus bringing the total acquisition by the company to 70%. Under the new terms, the Council asked KEPCO to pay 51% of the plant’s shares at the 2007 valuation of $549.01million, and pay for an additional 19% of the shares at the current valuation of $670 million.

 

The DISCO Investors

NEDC/KEPCO Consortium

Asset: Ikeja Electricity Distribution Company

Cost: $131 million

Key Individuals: Mr. Kola Adesina (Chairman NEDC/KEPCO), Mr. Tonye Cole (CEO, Sahara Energy Group), Mr. Tope Shonubi (Executive Director, Sahara Energy Group)

Summary: New Electricity Distribution Company (NEDC) and Korea Electric Power Corporation (KEPCO), which are partnering Sahara Energy as local partners, acquired the Ikeja Distribution Company. Tope Sonubi and Tonye Cole are known players in the Nigerian oil and gas sector and as noted above, had already been involved in the power sector as way back as 2007 through their partnership with KEPCO with regard to the Egbin GENCO.

There were some negative reactions to the fairness of awarding the Ikeja DISCO and Egbin GENCO to the same consortium as this could lead to monopolistic behaviour and could adversely affect efficiency. However, the chairman of the Technical Committee, National Council on Privatisation; Mr. Atedo Peterside stated that the rules allow a core investor to win a maximum of any two DISCOs and one GENCO. The chairman of the NEDC/KEPCO consortium, Mr. Kola Adesina, on his own part has taken a tough stance against institutional debtors, especially government parastatals, warning them to pay up their debts or face disconnection.

 

Vigeo Power Limited

Asset: Benin Electricity Distribution Company

Cost: $129 million

Key Individuals: Mr. Victor Gbolade Osibodu (Chairman, Vigeo Holdings) Mrs. Funke Osibodu (CEO, Vigeo Power)

Summary: Vigeo Power Limited acquired the Benin Electricity Distribution Company through the assistance of Stanbic IBTC, which helped in raising equity and providing debt financing to part fund the acquisition. Mr. Victor Gbolade Osibodu, the main promoter behind the Vigeo consortium, is the chairman of Vigeo Holdings and is also the husband of former managing director of Union Bank, Mrs. Funke Osibodu. Mrs. Osibodu is now the current managing director/CEO of Vigeo Power Limited.

Vigeo Holdings has been running a company called Global Utilities Management Company (GUMCO) founded in 1999 as a utility infrastructure management company providing services to improve the efficiency in the downstream sector of the electric power industry. GUMCO has, in the past few years, been involved in the National Prepayment Metering Programme in partnership with the Benin Electricity Distribution Company.

The consortium comprises Vigeo Holdings Limited, as the consortium lead and equity member,  Global Utilities Management Company Limited (GUMCO) as local technical partner and equity member, African Finance Corporation (AFC) as equity member and Tata Power Delhi Distribution Limited (TPDDL) as well as the Calcutta Electric Supply Corporation Limited (CESC) as the foreign technical partners. According to Osibodu, the consortium plans to invest an additional N40billion into the Benin Disco for infrastructure over the next five years.

 

KANN Utility Consortium Company Limited

Asset: Abuja Electricity Distribution Company

Cost: $164 million

Key Individuals: Alhaji Shehu Malami (Chairman, KANN Consortium), Mr. Neil Croucher (CEO, KANN Consortium)

Summary: Standard Bank of South Africa (SBSA) acted as the financial advisors to Copperbelt Energy Corporation (CEC) Plc with respect to its acquisition of 60% shareholding in Abuja Electricity Distribution Company vide Kann Utility Consortium Company Limited. SBSA and Stanbic IBTC also assisted KANN Utility Consortium Company Limited in respect of posting of its bid bonds, preferred bidder’s guarantee and providing debt financing to part fund the acquisition.

KANN Utility Consortium is a joint venture between CEC and Xerxes Global Investments Limited. CEC is a twenty year old Zambian based company engaged in generation, transmission and distribution of electricity predominantly to the mining sectors in Zambia, Congo Democratic Republic and South Africa. The chairman of the company Alhaji Shehu Malami is an astute business man who has been chairman of companies such as Costain and PZ. Former director in charge of operations at CEC, Neil Croucher is to head the new interest as managing director.

 

Sahelian Power SPV Limited

Asset: Kano Electricity Distribution Company

Cost: $102 million

Key Individuals: Alhaji Yusuf Hamisu Abubakar (CEO, Sahelian Power), Alhaji Umaru Mutallab (Chairman, Sahelian Power)

Summary: Sahelian Energy Power SPV Limited, which acquired the Kano Disco for $102 million, is a consortium comprising Incar Power Limited (IPL) which is promoted by Alhaji Umaru Muttalab, Dantata Investment and Securities Limited which is promoted by Alhaji Aminu Dantata, Sahelian Energy and Integrated Services Limited (SEIS), promoted by Alhaji Yusuf H. Abubakar, Highland Electricty Limited (HEL), promoted by Alhaji Kashim Bukar Shettima and Kayseri Ve Civari Elektrik T.A.S. (KCETAS), a Turkish electricity generation and distribution company.

The chairman of Sahelian Power, Alhaji Umaru Mutallab is a respected business and banking mogul, largely credited for playing a major role in introducing Islamic Banking into Nigeria. Alhaji Yusuf Hamisu Abubakar, the managing director of Sahelian Power, is a commissioner at the Nigerian Communications Commission (NCC), a one-time executive secretary of the Petroleum Development Trust Fund (PTDF) and former lecturer at the University of Nigeria, Nsukka and the Ahmadu Bello University, Zaria. He is also board member at Niger Insurance Company and was said to have once been nominated for a ministerial post by Vice President Namadi Sambo.

 

4Power Consortium Limited

Asset: Port Harcourt Electricity Distribution Company

Cost: $124 million

Key Individuals: Mr. Augustine Nwokocha (Chairman, 4Power Consortium), Governors of Bayelsa, Cross River, Akwa Ibom and Rivers State

Summary: The Governments of Bayelsa, Cross River, Akwa Ibom and Rivers State are firmly behind the 4Power Consortium which acquired the Port Harcourt Electricity Distribution Company, with Rivers State in particular authorizing Guarantee Trust Bank Plc (GTB) to issue bonds and guarantees on behalf of 4Power Consortium Limited to enable the acquisition of the asset.

4Power Consortium Limited has nine equity companies in the consortium including; Taleveras Group of Companies Limited; Lilleker Brothers (Nigeria); Income Electrix Limited/CESC Limited Joint Venture; Skyview Power Technologies Limited; First Independent Power Company Limited; Akwa Ibom Investment and Industrial Promotion Council (AKIIPOC); Paradise Power Nigeria Limited; Bayelsa Electricity Company Limited; and CESC. The chairman of 4Power Consortium, Mr. Augustine Nwokocha, is also the commissioner of energy for Rivers State. He has stated that the new company’s core functions will continue to be distribution and marketing of electricity in Rivers,Akwa Ibom,Bayelsa and Cross River States in Nigeria’s South-South region.

 

Integrated Energy Distributing and Marketing Limited

Asset: Ibadan Electricity Distribution Company, Yola Electricity Distribution Company

Cost: $171 million ($126.75 million for Ibadan and $44.25 million for Yola)

Key Individuals: Gen. Abdulsalami Abubakar (Chairman, Integrated Energy), Mr. Tunde Ayeni (Vice Chairman, Integrated Energy), Dr. Sola Ayandele (CEO Integrated Energy)

Summary: Integrated Energy was one of the earliest firms to complete payment for its respective bids and was the only investor that acquired two distribution companies. The company is promoted by a former military head of state, Gen. Abdulsalami Abubakar. The retired general was Nigeria’s head of state for almost a year after the death of his predecessor, Gen. Sani Abacha in 1998. He is currently regarded as an elder statesman with several international appointments and honorary degrees. The vice chairman of the company, Mr. Tunde Ayeni, is a seasoned lawyer and astute business man and currently sits on the board of Skye Bank and Aso Savings and Loans Plc.

Integrated Energy has entered into a technical partnership with the Manila Electric Company (MERALCO), the Philippines largest distributor of electric power, to manage its technical facilities. The vice chairman Mr. Tunde Ayeni has said that the company is planning to invest in massive human capital development and advanced technological input to ensure stable power in the country and also intends to promote the culture of energy saving.

 

Interstate Electrics Limited

Asset: Enugu Electricity Distribution Company

Cost: $107.4 million

Key Individuals: Sir Emeka Offor (Chairman, Interstate Electrics Limited)

Summary: The Enugu DISCO was acquired by the Sir Emeka Offor promoted Interstate Electrics amidst some controversy. It did not meet up with the 75% payment deadline and many questioned why Interstate Electrics should be given the nod ahead of other capable bidders like Eastern Electric sponsored by a consortium of investors which included Geometric Power Limited led by Professor Barth Nnaji, the five South Eastern State governments, Nestoil, Aba Power Limited and Mr. Pascal Dozie, the founding chairman of Diamond Bank. It however emerged that Interstate took advantage of the available window for the completion of outstanding balance as spelled out in the Share Purchase Agreement (SPA).This apparently gave Interstate Electrics a 20 working day extension after the expiration of the original deadline on August 21 to make payment.

Sir Emeka Offor, is the chairman of Interstate Electrics while he is also chairman of Chrome Consortium Energy Nigeria Limited, a company with interests in oil and gas services, telecommunications and logistics. Interstate Electrics Limited consortium comprises Chrome Consortium Energy Nigeria Limited, Powerhouse International Limited, and Metropolitan Electricity Authority (MEA) as the consortium’s technical partner. Metropolitan Electricity Authority of Thailand possesses over 50 years experience and currently distributes over 12,000MW of electricity in Thailand.

 

West Power and Gas Limited

Asset: Eko Electricity Distribution Company

Cost: $135 million

Key Individuals: Mr. Charles Momoh (Chairman, West Power and Gas), Dr. Tunji Olowolafe (Director, West Power and Gas), Mr. Ernest Orji (Director, West Power and Gas)

Summary: Mr. Charles Momoh, Dr. Tunji Olowolafe and Mr. Ernest Orji are the key promoters of West Power and Gas Limited (WPG). Mr. Momoh, aside from being chairman of WPG is also the managing director of Atlantic Meridean Limited, an indigenous oil servicing company. Dr. Olowolafe, a medical doctor by profession, is the chairman and managing director of Deux Project Limited, a civil engineering, construction and consultancy company. He also sits on the board of several other companies. Mr. Orji, a former non-executive director of Finbank Plc, prior to his removal along with three others by the Central Bank of Nigeria, is the chairman of Alpha Consortium Limited, a company with considerable experience in the power sector.  He is also the lead investor of a consortium that owns the Southern Sun Ikoyi Hotel.

The WPG consortium comprises Alpha Consortium Limited, Atlantic Meridean Limited, Africa Infrastructure Investment Fund 2 Mauritius, and Siemens Limited of Germany, the executor of the recently commissioned 434mw Geregu II National Integrated Power Project (NIPP) under the Niger Delta Power Holding Company (NDPHC). WPG has allocated $250 million towards rehabilitation work while it has allocated a further US$48 million towards a power purchase agreement with the Nigerian Bulk Electricity Trading Plc (NBET).

 

Aura Energy Limited

Asset: Jos Electricity Distribution Company

Cost: $82 million

Key Individuals: Alhaji Garba Mohammed Noma (Chairman, Aura Energy),

Summary: Alhaji Garba Mohammed Noma, is the key promoter of Aura Energy. He is a seasoned administrator with more than thirty years’ experience at senior executive level in the Nigerian public and private sector. He is also a politician and a former speaker of the House of Assembly in Bauchi State in the first republic.

The Aura Energy Limited consortium is made up of Aura Energy Limited and its technical partner; Aydem Elektrik Dagitim A.S. of Turkey. Aydem has over 20 years experience in the Turkish power sector and currently distributes reliable energy supplies to over 1.5 million customers in its distribution region. It is to provide Aura Energy with its specialist knowledge and expertise to improve the performance of the Jos Electricity Distribution Company.

 

*Compiled by the Reporters at Energy Mix Report.

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