PHCN: FG rakes in N358.04bn

All things being equal, the Federal Government may have raked in about $2.238 billion or N358.045 billion from the sale of 15 Power Holding Company of Nigeria, PHCN, successor companies, which transaction deadline ended yesterday.

The amount represents 7.18 percent of the national budget of N4.987 trillion in 2013, making it the biggest privatisation sales ever in the history of Nigeria and Africa.

The sum is derived from the $559.44 million already paid by the 14 bidders as 25 percent of the total cost of their bids for the respective distribution (Discos) and Generation (Gencos) companies unbundled from PHCN.

Already economic experts have called for prudence in the spending of the funds, saying “the government should account for the disbursement of the money properly; it should not be used for politics.”

However, there was no official confirmation on the proceeds realised from the National Council on Privatisation, NCP, or the Bureau of Public Entreprises, BPE, which executed the sales.

NCP Chair speaks

Chairman, Technical Committee of NCP, Mr. Atedo Peterside, told Vanguard on telephone that at least 13 of the 14 bidders that had paid their 25 percent bond for the 15 PHCN successor companies beat the 5p.m. yesterday deadline for the payment of the balance of 75 percent of their bids.

He said: “I can confirm that nine bidders out of the 10 for the Discos paid, four out of the five Gencos paid, one partially paid because of issues with banks transfers.

“But we will only be able to say for sure by tomorrow (today) how much was realised. Don’t forget some paid in Dollars and some in Naira, and for some of those who paid in Dollars, the amount will not hit our bank until tomorrow.”

Successful bidders

Among those that met the payment deadline were      Interstate Electrics Limited, Enugu Disco; Vigeo Consortium, Benin Disco;    Integrated Energy Distribution & Marketing Company, Ibadan and Yola Discos, respectively; 4Power Consortium, Port-Harcourt Disco, and Aura Energy for Jos Disco.

Others are      West Power & Gas, for Eko Disco; NEDC/KEPCO, Ikeja Disco; Transcorp/Woodrock Consortium, Ughelli Power Plc; Mainstream Energy Ltd, Kainji Power Plc;   Kann Consortium, Abuja Disco; Sahelian Power SPV, Kano Disco;             Amperion Power Company Limited, Geregu Power Plc, and North-South Power Company for Shiroro Power Plc.

Taking possession

By this payment, the bidders are now closer to taking possession of the respective PHCN distribution and generation companies they bided for, following approval by the Federal Government.

This is even as organised labour has criticised the transaction in view of outstanding issues.

However, any bidder which was unable to pay the balance of the 75 percent will lose the 25 percent already paid, and the slot for ownership for the company will be given to the reserved bidder in that category.

Peterside said: “Any bidder that failed to meet his obligation will lose the slot for that company, and we will hand it over to the reserved bidder.”

Although he refused to give more details, he expressed delight that the process had ended seamlessly, adding that it was left for the new owners to get to work and give power to Nigerians.

Bidders’ plans

Agreeing, one of the promoters of the Vigeo Group, Mr. Victor Osibodu, disclosed that his group plans to invest additional N40 billion into Benin Disco for infrastructure over the next five years upon takeover.

He confirmed that his group paid $96.75 million as 75 percent balance for their bid.

Similarly, West Power & Gas Limited, WPG, completed the payment of US$101.25 million (N16.2 billion) for the acquisition of 60 percent stake in Eko Disco.

According to a statement by the company, the payment was made two days ahead of the BPE deadline, and follows payment of the initial 25 percent deposit of US$33.75 million (N5.4 billion) earlier this year.

The company further disclosed that the total amount of the transaction is US$135 million (N21.6 billion).

Commenting on the completion of payment, Mr. Charles Momoh, Chairman, WPG said: “Today marks a tremendous milestone and a major step forward towards the completion of the most significant privatisation of government assets in Nigeria’s history.

“The success of the power transformation programme is critical to the future development of Nigeria. WPG, along with the other preferred bidders, fully appreciate the magnitude of the task before us and are honoured to have been selected.

“As a sector, we must work together to ensure we achieve the desired results.

“As well as securing the finance to complete the acquisition, WPG has brought together a world class team of local and international industry experts to implement the rehabilitation and expansion programme.

“We look forward to the completion of the acquisition process and all matters to be resolved so we can begin the task of transforming the power sector in the country.”

WPG raises N80bn

He further stated that over the years, WPG had raised close to US$500 million (N80 billion) in equity and debt financing to fund the acquisition of the Eko Disco and the significant rehabilitation and transformation work required to improve distribution network infrastructure and operations.

He noted that US$250 million (N40 billion) had been allocated to rehabilitation, while the company had allocated US$48 million (N7.68 billion) towards a power purchase agreement with the Nigerian Bulk Electricity Trading, NBET.

Giving a background of the company, Momoh said: “West Power & Gas Limited, WPG, is a Nigerian Power Investment Holding Company established to invest in Nigeria’s fast evolving power sector and to participate in the development of the sector as a whole.

“The company is in the final stages of completing the acquisition of the Eko Distribution Company and will explore other opportunities for investment in the sector as a whole, including generation.”

UBA finances Shiroro

Furthermore, Pan African financial services group, United Bank for Africa, UBA, Plc, Tuesday, entered into a US$82 million financing deal with North South Power Limited, a strategic investor in the power sector, to finance the acquisition of the Shiroro Hydro-electric Power Plc Concession.

The funds, arranged by UBA Plc and UBA Capital Plc, facilitated payment of the balance of 75 percent of the acquisition cost to BPE ahead of yesterday’s payment deadline.

UBA Plc is the lead bank and Mandated Lead Arranger to the transaction, while UBA Capital is the Mandated Lead Arranger, Debt Adviser and Facility Agent.

According to the Group Managing Director, UBA Plc, Mr. Phillips Oduoza, the seamless completion of the transaction by all parties involved is a reflection of the capacity of Nigerian banks to champion the financing of power reforms project across the country.

He said: “This transaction is a milestone for the bank and we are glad to be part of it. It is another demonstration of UBA’s commitment, appetite and capability for big ticket transactions.

“Importantly, it is our commitment to Federal Government’s efforts in increasing capacity in the power sector. With our partners, UBA Capital Plc, we strongly believe that this financing will help in jumpstarting the much needed investment in the power sector.”

Group CEO, UBA Capital Plc, Rasheed Olaoluwa noted that the investment group had been an important partner in the privatizasion process as it is currently advising three out of the six generation companies recently conceded by Federal Government.

800Mw target

Engineer Olubunmi Peters, Vice Chairman, North South Power Company Limited, praised the commitment shown by UBA Plc and UBA Capital Plc in raising the funds.

He said: “The two institutions have again shown commitment to the power sector. With this fund, we are set to modernise the Shiroro Hydro Electric Power.

“Our company intends to add 600 megawatts into the national grid and add 200 megawatts in the third year.

”The financing was a major milestone for UBA Plc, UBA Capital Plc, North South Power Company Limited and, most importantly, the Nigerian power sector as the Federal Government’s induced incentives to attract private sector participation across the sector is coming into effect.”

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Post Author: OgoniNews

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