• Monday, June 24, 2024
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BusinessDay

Nigeria seals $1bn deal on five power plants

FG targets 1,268MW boost from eight new power plants

Nigeria has reached the final stage of its plan to sell five key power plants at a cost of $1.15 billion, with the bid winners soon to be announced.

The move is part of the government’s broader strategy to overhaul the energy sector, boost efficiency, and attract private investment.

With the bid process now complete, the sale marks a crucial step towards addressing the country’s chronic power shortages and fostering economic growth.

Adebayo Adelabu, the Minister of Power said the bidding process had been finalised and a final report submitted to the National Council of Privatisation (NCP) which has Kashim Shettima, Nigeria’s vice president, as its chairman.

“At the next NCP meeting, a final announcement of the preferred bidders will be made public,” Adelabu said at BusinessDay’s Powering Nigeria conference, Friday.

Read also: Nigeria finalises bid process to sell five power plants for $1bn

“The assets will not only increase revenue for the three levels of government, it will also bring better efficiency for the power sector,” Adelabu said.

He noted there are a few teething problems such as the bid quotes and payment mode and other issues which are already being resolved.

BusinessDay findings showed the five power plants include a 434 megawatts Geregu II gas-fired Kogi, the 451MW Omotosho II plant in Ondo, and the 750MW Olorunsogo II plant in Ogun State.

Others include the 563MW Odukpami power plant in Calabar, Cross River State; and the 451MW Benin-Ihovbor plant in Edo State.

The Benin-Ihovbor plant with five power-generating turbines would go for $420 million; Calabar Odukpami plant with five turbines would be sold at about $260 million; while the Geregu plant with four turbines would go for $215 million.

It was gathered that the Omotosho plant, which has four power-generating turbines, would be sold at about $85 million; while the Olorunsogo National Integrated Power Project (NIPP) with also four turbines would cost $170 million.

Read also: Ten national power plants operating at 10% capacity- Adelabu

In December 2022, BusinessDay reported the federal government and the 36 state governors agreed to sell five power plants under the National Integrated Power Projects and use the proceeds to fund the 2023 budget.

The agreement came after over two years of disputes and legal tussles regarding the sale of the NIPP plants managed by the Niger Delta Power Holding Company (NDPH).

Alex Okoh, former director general, Bureau of Public Enterprises, had disclosed the agreement between the Federal Government and the States regarding the NIPP plants to journalists in Abuja during an interview. The disclosure was, however, opposed by various groups.

There have been discussions and plans for the sale of the NIPPs by the Bureau of Public Enterprises for several years, with the specific details and target sale amount evolving over time.

In April 2021, the National Council on Privatisation approved the sale of five NIPPs through a fast-track strategy. The estimated value of these five plants was not publicly disclosed at the time.

In March 2022, the Nigerian National Petroleum Corporation expressed interest in acquiring some NIPPs, indicating continued progress with the sale.

In December 2022, the former BPE boss, Okoh, confirmed an agreement between the Federal Government and states for the sale of five NIPPs.