By Clara Nwachukwu
Prospective investors in Nigeria’s power distribution sub‑sector, would be made to produce a loss reduction programme as part of their eligibility to bid for any if the 11 distribution companies unbundled from the Power Holding Company of Nigeria, PHCN.

This was the wrap up detail handed down by the Director General of the Bureau of Public Enterprises, BPE, Ms. Bolanle Onagoruwa, to participants in the final leg of the Nigerian Electric Power Investors’ Forum, which ended last week in Johannesburg, South Africa, 21 days after its take off in Dubai, United Arab Emirates.

Onagoruwa directed interested bidders to submit a proposal showing their Aggregate Technical, Commercial and Collection, ATC &C loss reduction programme for the first five years, at the Request for Proposal, RFP stage of the privatisation exercise of the successor companies.

She explained that the ATC & C loss reduction proposal will be based on the final Multi Year Tariff Order, MYTO issued by the Nigerian Electricity Regulatory Commission, NERC.

According to her, the efficiency levels assumed by the NERC will be the minimum benchmark, saying, AThe value to be placed on each distribution company will be determined in line with the MYTO issued by NERC.

She also said the MYTO value would help bidders determine in advance how much they are expected to pay for acquiring 51 percent equity of each company.

“The bidder who passes the technical evaluation and offers the highest discounted value of ATC & C will be designated the preferred bidder. The winning ATC & C proposal will be incorporated into the MYTO document and issued by NERC. The winning ATC & C proposal will be binding on the investor,” she added.

Listing other requirements, the BPE boss said bidders are also to submit a security deposit, in addition to the Expression of Interest, EOI stage; the Technical and Commercial Bids stage; and two‑step Bid evaluation process (i) technical and (ii) commercial.

Each chapter of the investors’ forum, which took the BPE and its entourage to other countries including the United Kingdom and the United States, provided an opportunity for the agency that is shopping for core investors woo interventional investing community to Nigeria=s failed power sector.

Reiterating the importance of distribution in the power chain, the BPE boss told participants in London that any reform that does not address the challenge in the distribution network would collapse, as there would not be adequate revenue to fund the rest of the value chain ‑ generation and transmission.

This, she argued is because the revenue that drives the entire value chain of the electricity industry (generation, distribution, transmission ‑ market operator and system operator) comes from consumers through the distribution companies.

Apart from reassuring investors of federal government’s commitment to the privatisation programme as well as adequate incentives, the forum also promised of a cost-reflective tariff regime.

On the BPE entourage included members of the National Council on Privatisation, the National Assembly, representatives of Ministry of Power and the Power Holding Company of Nigeria, PHCN, the Presidential Taskforce and the Nigerian Electricity Regulatory Commission.