Clara Nwachukwu
The Bureau of Public Enterprises has said that there are numerous benefits prospective investors in the power sector can derive from the series of global investment forums, which kicked off last week in Lagos.

The Director General, the Bureau, Ms. Bolanle Onagoruwa, highlighting the benefits of the global forum, said, “This forum creates an opportunity for the Bureau to speak directly to the investing public, update them on recent developments and bring clarity to the transaction and its processes.

It will provide a platform for potential bidders who have some concerns in investing in the Nigerian power sector to have the opportunity of having those concerns addressed by the relevant government agencies and the transaction managers.”

As a result, the BPE boss argued that the agenda for the two_day forum was designed to cover all critical issues in the electric power sector such as  market design, tariff and regulation, fuel source, generation and transmission, risk mitigation strategies and a host of others.

She further explained to participants at the forum that the companies on offer are the 11 distribution companies; four thermal stations; and two hydro stations.  “The transmission company will be managed by a management contractor (the process of procurement is already well advanced). The privatisation of the power utilities is unique and different from previous privatisation programmes in the country in that it is driven by the need for efficiency and investment rather than optimisation of proceeds to the government. Indeed we have tagged this event ‘Privatising for Efficiency’.”

Although she refused to disclose how many companies have so far indicated interest, but reiterated that “the transaction process will be transparent and the divestiture will be through international competitive bidding. In other words, the transactions will revolve around our cherished core values of accountability and due process. It is apt to point out that only bidders’ technical ability and financial capability that will influence the outcomes.”

Onagoruwa also disclosed that in implementing the power sector reforms, the BPE  “followed the path of structured transition” by creating transition reform agencies such as the Nigerian Electricity Liability Management Company, NELMCO, for the management of stranded liabilities, pension liabilities and other liabilities of the PHCN as well as incorporating the Nigeria Bulk Electricity Trading Company, or “Bulk Trader,” responsible for bulk procurement and sale of power in the sector to alleviate purchase fears of prospective investors.

She stated that government had worked out various strategies under which investors could participate in the different sub_sectors of power.

For instance, she said, “Under the privatisation strategy for distribution companies, a private sector operator will acquire controlling equity interest in any of the distribution companies with a view to rapidly improving their operational efficiency.”

Similarly, she added, “The prospective investors/concessionaires in the generating companies will be responsible for operating the stations, improving the generation capacity and making the necessary investments to enhance the fortunes of the companies in line with the overall objectives of the Federal Government.”

Against this backdrop, she encouraged investors to enter into strategic alliances that will best deliver the competencies being sought, adding that it was not only important to get competent operators of these utilities, but also have ones that have access to investible funds needed for the massive infrastructural upgrades.