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Power privatisation: Investors confidence excites BPE

New York – The Bureau of Public Enterprises (BPE) says it is encouraged by strong interest shown by investors on the proposed sale of electricity distribution companies and power stations in Nigeria.

The Director-General of the privatisation agency, Ms Bolanle Onagoruwa, gave the indication during a chat with reporters in New York on Tuesday after a day-long meeting with prospective investors.

Similar meetings were held last week in Dubai and London and the BPE team will be in Johannesburg, South Africa next week.

“We have had very strong feelers from investors in Lagos, London and Dubai.

“We have had a feel of potential investors, fund managers, private equity fund managers and basically there is a lot of interest,’’ she said.

The timeline for the power sector reforms, sets a Feb. 18 deadline for expressions of interest for the proposed sale of 11 distribution companies, two thermal generating firms and two hydropower stations.

The government believes that privatisation of the sector backed with increased investment will turn around Nigeria’s epileptic electricity supply.

Commenting on the timing of the sale few months to general elections, Onagoruwa said prospective investors had concentrated their questions more on technical issues than political concerns.

According to the BPE boss the preferred investor will not be made to pay until after the elections.

“I must confess that their questions were more technical than worries about the political.

“The questions have centred on fuel sources and regulation; and these are issues that they require comfort about and to a large extent we have been able to answer the questions.

“For some reasons, they seem to have confidence and that is the feedback that I have received.

“They are more concerned about whether we are going to have enough gas supply, will the gas supply agreement be in place. Those are the things that they are more concerned about,’’ she added.

Mr Neal Rich, a prospective investor representing JNL, a US-based company, urged government to ensure “secure transactions’’ for those interested in distribution companies and security of the pipeline on generation.

“ From a distribution perspective, there has to be a guaranteed rate of returns and reliable power supply.

“ On the generation side, our principle interest is security of the pipeline and that is not a financial incentive, but security of gas supply is very critical to making the project
work,’’ he said.

Rich, however, commended the power sector reforms saying “we see Nigeria as a great place to work for the people’’.

Another prospective investor, Mr Omotayo Idowu of a U.S based firm, Desmear Systems Inc., said government must ensure that competent investors emerged from
the exercise.

He said stolen Nigeria funds stashed in western countries should be repatriated and invested into the power sector.

He advised government to forgive those who are willing to return stolen funds to the country for investment into the critical sectors of the economy.

Eleven distribution companies up for sale are located in Abuja, Benin,Enugu, Eko, Ibadan, Ikeja, Port Harcourt, Jos, Kaduna, Kano, and Yola.

The thermal power stations are Ughelli Power Plc, in Delta and Geregu Power Plc in Kogi.

The hydropower companies, for which concessionaires are sought, are Kainji Power Plc — comprising power stations in Niger and Kwara States in north-central Nigeria — and Shiroro Power Plc, also in Niger State. (NAN)


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