Nigeria : FG Okays 525 Firms’ Bids for PHCN Privatisation

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Lagos — The Federal Government has approved about 525 bids to proceed to the next stage in the privatisation of electricity utility, which were shortlisted for the successor-companies created from Power Holding Company of Nigeria, PHCN.

The bulk of the pre-qualified bids -272- were for the generating companies, while the balance of 253 bids is for distribution, all of which have already been approved by Vice- President Namadi Sambo, who is also the Chairman of the National Council on Privatisation, NCP, which is in charge of the exercise.

The Bureau of Public Enterprises, BPE, in a statement on Wednesday, said the NCP Secretariat received some 929 bids for the successor-companies from the 331 Expressions of Interest, received from prospective investors.

The pre-qualified bidders will be required to pay a $20,000 for each company’s interest and sign a confidentiality agreement before receiving bid documents and being admitted to the Data Room, BPE said.

The expiration of the deadline for the submission of bids by prospective investors was March 4.

The Bureau said it received about 331 envelopes containing the EOIs. This was broken into 174 for generating companies and 157 for distributing companies.

However, on opening the EOIs for the successor companies, there were 929 bids when the individual bids were sorted out. “The breakdown of the individual bids showed that 529 bids were submitted for distribution companies and 400 bids for generating firms,” the BPE said.

Explaining further, the Bureau said it “developed evaluation criteria in accordance with the requirements of the EOI. It also considered a benchmark that would provide reasonable basis for pre-qualifying bids. A strong inter-agency team constituted the evaluation committee that undertook the assignment.”

Last year, the BPE had called for EOIs in local and foreign media advertorials between December 13 and 20, 2010, in which it invited prospective core investors to express interest in the 11 distribution companies unbundled from the PHCN; four thermal power stations, and concessionaires for the two hydro power stations.

The initial deadline for receipt of EOIs was February 18, 2011, which, upon the vice president’s approval was later extended to March 4, following representations by prospective investors who attended the Electric Power Investors’ Fora held in Lagos, London Johannesburg, New York and Dubai, which were used to woo world class investors to participate in the privatization exercise.

According to the BPE, potential bidders for the distribution companies are expected to be existing power distribution companies or core investor groups with power distribution companies as long-term technical partners. Successful bidders will be responsible for operating the distribution companies, making the necessary investments to improve the distribution network and customer service in line with the objectives of the Federal Government of Nigeria set out in the National Electric Power Policy, NEPP.

With regard to the generating companies, potential bidders/concessionaires, who should be existing local and/or international power generators or investors with power generators as long-term technical partners, will be responsible for operating the stations, improving the generation capacity and making the necessary investments in line with the objectives of the NEPP.

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