• Tuesday, March 05, 2024
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5,000mw NIPP projects at risk as investors develop cold feet

electricity

The hope of Nigeria getting 5,000 additional megawatts  of electricity to be added to the national grid has been dashed, as the concerns which bided for the seven out ten of the National Integrated Power plants (NIPPs) have failed to make full payment of the value of the assets.

The investors were alleged to have developed  cold feet over the assets for fear that the anti-corruption posture of the current government would eventually lead to a probe on how the assets were procured.

The preferred bidders for the plants were required to pay Unconditional Bank Guarantee of 15 per cent of the price offered by them within 15 business days.

An industry source told BusinessDay  that the  failure  of  the  government  to ensure steady  gas supply to the power plants was halting forward movement on the sale of the assets.

   It was learnt that aside from this, some  of  the investors are uncomforable with the new government  of Muhammadu Buhari because they  are  not  sure  of  the  policy direction of his administration.

An industry source said some of the investors got multiple assets under different names and feared that  a new transparency inclined government would fing this questanable.

Another source close to Niger Delta Power Holding (NDPH) said it was not true that there was no gas   at all, but that what the plants are getting cannot make them commercially viable.

“The investors said the only condition that would give them the confidence to make full payment is if there is  steady gas supply to the plants, but the government has not been able  to  guaranty this”,he said

electricity

The implication of nonpayment  of the full value of the plants is that the much expected 5,000megawatts of electricity from the NIPPs cannot take off for now.

The country was expected to rake in $4.25 billion at the conclusion of the privatisation process of the seven NDPHC power plants.

The plants put on offer were the 434MW Geregu II plant; 630MW Calabar plant; 378MW Egbema plant; 504MW Ihorvbor plant; 252MW Gbarain plant; 504MW Ogorode plant; 252MW Omoku plant; 1,076MW Alaoji plant; 750MW Olorunsogo plant; and the 500MW Omotosho plant.

Seoul Electric Power emerged the preferred bidder for Geregu II with a bid of $613,111,113.

Similarly, Ihorvbor had EMA Consortium and Index Consortium emerging as preferred and reserve bidders, having bid $580 million and $575 million respectively.

EMA Consortium and Nebula Power Generation Consortium emerged preferred and reserve bidders for Calabar, with bids of $625 million and $623 million respectively, while Dozzy Integrated Power Ltd emerged preferred bidder for Egbema with a bid of $415,075,000. AITEO emerged reserve bidder for the same plant having bid $392 million.

Gbarian had KDI Energy Resources as preferred bidder with a bid of $340 million and Azikel Power Ltd as reserve bidder with a bid of $305,090,665 while Daniel Power was preferred bidder for Ogorode with a bid of $531,777,777 and ESOP as reserve bidder with a bid of $510 million.

Shynobe International Ltd emerged preferred bidder for Omoku with $318,710,840, and AITEO Consortium as reserve bidder with a bid of $312,500,000, while AITEO, the sole bidder for Alaoji, emerged preferred bidder with a revised bid of $902 million, after its initial bid of $680 million was said to have been below the reserve price.

ENL Consortium and Index Consortium emerged preferred and reserve bidders for Olorunsogo after bidding $751,240,000 and $730 million respectively, while Omotosho Electric power emerged the preferred bidder for Omotosho plant after bidding $659,999,000 and ENL as reserve bidder with a bid of $645,156,220.

Olusola Bello