The Federal Government and the preferred bidders of three independent power plants (IPPs) are currently negotiating a $1.975 billion (about N711.8 billion) payment arrangement to sell 80 percent shares in the entities.
The IPPs are: Calabar Generation Company (560 megawatts (MW); Geregu GenCo (434MW) and 513MW Omotosho GenCo.
The Managing Director of the Niger Delta Power Holding Company (NDPHC), Mr. Chiedu Ugbo, disclosed this in Abuja recently at the end of year media briefing.
According to him, NDPHC remains the mother firm, even as he noted that the privatisation exercise for the 10 GenCos under the National Integrated Power Projects (NIPP) was phased for greater transparency.
The preferred bidders emerged for the 10 thermal plants in March 2014, seeking to own 80 percent equities of $5.8 billion (about N2.09 trillion) in the plants while the government retains the 20 percent equity.
The three operational GenCos in the first phase include: EMA Consortium, which won Calabar GenCo at $625million(N225.3 billion), Omotosho Electric Power won Omotosho GenCo at $659.9million (N237.8 billion), and Seoul Electric Power Ltd won Geregu GenCo at $690.2million (N248.7 billion) totalling $1.975m (about N711.8 billion).
Ugbo noted that the earlier agreement for the bidders to pay 25 percent of the bid price and later pay the 75 percent balance is what is being negotiated as bidders seek to pay lower than that due to liquidity issues but at the same price.
“We have negotiated the share sales agreement and we are negotiating what percentage the bidders should pay now and what they should pay later and when they should pay.”
He said upon consideration by the NDPHC and the Bureau of Public Enterprise (BPE), the technical and financial committees of the privatisation would be consulted before advising Vice President Yemi Osinbajo for a decision to hand over the plants to the investors.
The NDPHC boss said the transaction was delayed because, after the PHCN privatisation in 2013, the electricity market had liquidity crisis and foreign exchange (forex) issues which challenged investors and lenders in the power sector.
On the state of the NIPP plants, the company said the N701billion Payment Assurance Guarantee (PAG) of the Federal Government this year ensured it gets about 80 percent of its monthly invoice to pay for gas better than when it was getting only 30 percent payment.