Otedola, Transcorp, Others Win Bid to Buy Nigeria’s Power Generation Plants
The announcement of the preferred bidders which came shortly after the financial bid opening process for the generation plant was conducted signifies a milestone in plans to privatise the country’s electricity sector to boost growth in Africa’s second largest economy.
Speaking at the financial bid opening ceremony, Minister of State for Power, Darius Ishaku, said “This is a milestone in the power privatisation process.”
“I’m sure each and every one of you would agree the process has been transparent,” he told a room of bidding firms.
Mainstream and North-South had no competitors for their bids, raising question marks over the legitimacy of the sales.
There are also concerns over financing difficulties after the Nigeria’s central bank banned loans to 113 firms this week for failing to pay previous debts. These include Forte Oil and other firms bidding for power assets.
The sale of the remaining generation firm, which will run the Afam power plant, is being re-tendered after the Power Minister Barth Nnaji resigned last month when it was revealed he had a stake in one of the consortium bidding for the asset.
If Nigeria can fix its electricity problems it could launch Africa’s second largest economy into double-digit growth and help pull millions out of abject poverty.
But corruption, mismanagement and the strength of vested interests mean despite an estimated $40 billion of capital injected into reforming the power sector over the last two decades, capacity has only improved marginally.
The preferred bidders are:
1. Ughelli Power Plant: Price – $300 million – Winners: A consortium made up of Transcorp and four other international firms.
2. Sapele Power Plant: Price – $201 million – Winners: A consortium made up of Nigerian, Chinese and British companies
3. Geregu Power Plant: Price – $132 million – Winners: A consortium made up of Forte Oil, a firm majority-owned by Nigerian billionaire oil tycoon Femi Otedola.
4. Kainji Power Plant: Price – Unknown – Winners: Mainstream Energy, a group including Russian firm RusHydro and several Nigerian companies
5. North-South Power Plant: Price – Unknown – Winners: Mainstream Energy, a group including Russian firm RusHydro and several Nigerian companies
6. Shiroro Power Plant: Price – Unknown – Winners: A consortium made up of Nigerian companies
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