NIGERIA – The National Council on Privatisation (NCP) has approved Transcorp Power Consortium as the preferred bidder for the Afam Electricity Generation Company with a bid price of N105.3bn (about US$343.6 million).
Transcorp’s winning bid of $343.6m for the power plant was more than the winning bid of $265m in the previous privatisation transaction conducted in 2013.
According to the council, which is chaired by Vice-President Yemi Osinbajo, Transcorp Power Consortium, plans to invest US$350m in the firm over a period of five years after taking over.
The council also approved Quest Electricity Nigeria Limited as the preferred bidder for the re-privatised Yola Electricity Distribution Company (YEDC) with a bid price of N19bn (about US$62 million).
Quest’s bid price is higher than the $59m paid by the previous core investor during the initial acquisition in 2013.
For the Afam Genco, Diamond Stripes Consortium was approved as its reserve bidder with a bid price of N102.3bn.
A statement issued by the Head, Public Communications, in the Bureau of Public Enterprises, Amina Othman, on Thursday, said the NCP approved the bids at its second 2019 meeting in mid-October in Abuja.
The privatisation of Afam Electricity Generation Company failed during the first round of the power privatisation programme in 2013 due to issues stemming from gas supply to the plant.
Following the termination of the Share Purchase Agreement signed between Taleveras (the then preferred bidder) and the BPE in 2016, the NCP had in August 2017 approved the privatisation of the enterprise based on a strategy to be recommended by the transaction advisers.
Although the YEDC was successfully privatised and handed over to the core investor in 2013, it was repossessed by the Federal Government in 2015 after the core investor pulled out from the investment, citing insecurity in the North-East region of the country.
The new successful bidders are expected to operate the generation and distribution companies in line with the objectives of the Federal Government as set out in the National Electric Power Policy.
It is expected that they will make necessary investments to improve generation and distribution networks, as well as customer service.