Transnational Corporation of Nigeria plc, a publicly quoted company with diversified investments in hospitality, agribusiness and energy sectors, has emerged the preferred bidder for the Afam Power plc, beating two other contenders – Diamond Stripes Consortium and Unicorn Consortium – with a N105.3 billion bid.
In the same bid auction held Tuesday, Quest Electricity won the bid for 60 percent equity in Yola Electricity Distribution plc with a bid of N19 billion. It beat Sandstream Nig Limited, who was disqualified for not submitting a bank guarantee alongside the commercial proposal as required by the Bureau of Public Enterprise (BPE).
M. K. Ahmed, chairman, Technical Committee of the National Council on Privatisation (NCP), announced Transcorp Power Consortium as the winner of the commercial and financial bid for the privatisation of Afam Power plc. Diamond Stripes emerged the reserve bidder with a bid of N102.4 billion.
This means that the company has acquired 100 percent shares in the Afam Electricity Generation Company (Afam Power plc and Afam Three Fast Power Limited), bringing Transcorp available power generation to over 1,051MW, the second biggest after Egbin with 1,320 MW capacity.
“I think this is a good omen for the power sector,” Chuks Nwani, an energy lawyer, told BusinessDay by phone. “It means some players still have confidence in the power sector despite the market challenges. I have no doubt that Transcorp will find a way to succeed as the company has proven resilient in the power sector.”
Transcorp bought Ughelli Power Plant from PHCN with only four units poorly contributing an average of 160MW.
“With the systematic recovery of gas turbine units, Transcorp reached 340 MW by end of 2013. Transcorp power continued the journey in 2014 and was able to recover seven units in 12 months and total available capacity hit 560MW by the end of 2014,” the company said.
In 2015, Transcorp Power Limited in collaboration with GE (General Electric) replaced 100MW gas turbine, GT15, with a 115MW upgraded capacity. In March 2017, GT15 was commissioned by Babatunde Raji Fashola, minister of Power, Works and Housing, and tied to the national grid. In 2017 it added an additional 105MW from GT20 and ultimately reached 701MW available capacity from 16 November, 2017.
Recall that the National Council on Privatisation chaired Yemi Osinbajo, Nigeria’s vice president, had at its meeting on April 12 given approval for the four firms to proceed with the financial bids opening for the two remaining companies carved out from the defunct Power Holding Company of Nigeria.
The privatisation of Afam Electricity Generation Company could not be concluded during the first round of the power privatisation in 2013 due to inability to secure feedstock to the gas plant.
Yola DisCo, on the other hand, was successfully privatised and handed over to the core investor in 2013, but the investors declared a force majeure in 2015 citing insecurity in the North-East region of the country.
The nullification of the bid from Sandstream Nig Ltd made Quest Electric the sole bidder for the acquisition of Federal Government 60 percent shares in Yola DisCo.
ISAAC ANYAOGU
