Nigeria - 54 Investors Bid For Electricity Distribution Companies

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The Bureau of Public Enterprises (BPE) has received technical and financial proposals from 54 potential investors interested in buying Nigeria’s electricity distribution companies.

This is in keeping with the timeline for the privatisation of the distribution companies created from the unbundling of Power Holding Company of Nigeria (PHCN), which had July 31, 2012 as deadline for receipt of technical and financial bids from the potential investors. Confirming yesterday local report, the two electricity distribution companies in Lagos, the Eko and Ikeja distributing stations, received the most bids.

The breakdown of the bids received at deadline for the eleven distribution companies slated for privatisation shows that the Abuja Electricity Distribution Company plc received five (5) bids from prom prospective investors; Benin Electricity Distribution Company plc seven (7) bids; Enugu Electricity Distribution Company plc four (4) bids; Eko Electricity Distribution Company nine (9) bids; Ibadan Electricity Distribution Company plc seven (7) bids; Ikeja electricity Distribution Company ten (10) bids; Jos Electricity Distribution Company plc two (2) bids; Kaduna Electricity Distribution Company plc two (2) bids; Kano Electricity Distribution Company plc two (2) bids; Port Harcourt Electricity Distribution Company plc three (3) bids; and Yola Electricity Distribution Company plc three (3) bids.

Prospective core investors, who must be local and/or international power distributors or investors with power distributors as technical partners, 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.

Local news reported yesterday that Oando Gas and Power, Honeywell, and Gumco are among local and international firms to submit bids for the acquisition of the eleven electricity distribution companies scattered across the country. The three companies are going for Eko and Ikeja electricity distribution firms among the eleven offered for sale. ENL Consortium, one of the companies currently operating as concessionaire at the Nigerian port, is also said to be one of those that are interested in the electricity firms.

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.

Inter-State Electricity Limited, is a joint venture between Chrome Energy Consultium and Power House International Limited also submitted bid within deadline by Tuesday. 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.

Consequently, 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. Equally, 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.