Nigeria’s power reform process is on track as the Bureau for Public Enterprises (BPE) announced this evening that it has received bids from 54 investors for 11 electricity distribution companies put up for privatisation. Tuesday was the deadline set by the BPE to receive technical and financial proposals from investors interested in buying the distribution companies unbundled from the Power Holding Company of Nigeria (PHCN).
The Federal Government of Nigeria intends to sell as much as 70% of its stakes in the distribution companies to interested investors. The Nigerian government hopes that selling the electricity companies will not only bring the required efficiency in their management but also attract the significant level of investment required to meet Nigeria’s electricity needs.
Nigeria current produces less than 5000MW of electricity against an estimated need of about 30,000MW.
The breakdown of the bids received by the BPE shows that five companies are bidding for Abuja Electricity Distribution Company Plc, Seven companies are bidding for Benin Electricity Distribution Company Plc, Three Companies are bidding for Enugu Electricity Distribution Company Plc, Nine Companies are bidding for Eko Electricity Distribution Company Plc while Seven Companies are bidding for the Ibadan Electricity Distribution Company Plc.
Ten companies are bidding for Ikeja Electricity Distribution Company Plc, Two Companies each are bidding for Jos Electricity Distribution Company Plc, Kaduna Electricity Distribution Company Plc and Kano Electricity Distribution Company Plc. Also Three companies each are bidding for Port Harcourt Distribution Company and Yola Electricity Distribution Company Plc.
The BPE guidelines states that prospective core investors must be local and/or international power distributors or investors with power distributors as technical partners. The investors will be responsible for operating the distribution companies, making the necessary investments to improve the distribution network.
The transaction timeline reveals that the evaluation of the technical bids will take place between August 14 and 28, 2012. The National Council on Privatisation (NCP) will approve the results of the technical evaluation by September 11, 2012.
The deadline for the shortlisted bidders for generation companies to submit their letters of credit is September 18, 2012 while October 2, 2012 is the deadline for shortlisted bidders for distribution companies.
NCP’s approval will pave way for the opening of financial bids of the shortlisted investors.
The BPE will on September 25, 2012 open the financial bids of prospective investors for the generating companies while October 10, 2012 is the date for the opening of the financial bids for the distribution companies.
The announcement of the preferred bidders for the generating companies is October 9, 2012 while October 23, 2012 is the date for the announcement of the preferred bidders for the distribution companies.
The Nigerian electricity industry has been unbundled into generation and distribution companies and a single transmission company with a view to encouraging private sector participation and attracting foreign and local investment into the Nigerian power sector to ensure economic and reliable electricity supply.