• Thursday, June 13, 2024
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BusinessDay

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

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

…National Council of privatisation to announce winners

The Federal Government through the Ministry of Power has concluded the sale of five power plants under the National Integrated Power Projects at a cost of about $1.15bn.

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.

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

“A technical committee was set up headed by Babatunde Sanwolu, governor of Lagos state to oversee the process; The power plants were built with the Federation Account which meant the power plants are jointly owned by the three levels of government,” Adelabu said at BusinessDay’s energy event on Friday.

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

“At the next NCP meeting a final announcement of the preferred bidders will be made public; The assets will not only increase revenue for the three levels of government it will also bring better efficiency for the three levels of government,” Adelabu said.

BusinessDay findings showed the five power plants include e 434 megawatts Geregu II gas-fired Kogi, the 451MW Omotosho II plant in Ondo, and the 750MW Olorunshogo 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 $420m; Calabar Odukpami plant with five turbines would be sold at about $260m; while the Geregu plant with four turbines would go for $215m.

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

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).

Read also: India asks companies to fire-up power plants to meet rising electricity demand

Alex Okoh, former director general, Bureau of Public Enterprises had disclosed the agreement between the Federal Government and the states as regards 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.