Emma Ujah, Abuja Bureau Chief
The Privatisation of the National Electric Power Authority, NEPA, which metamorphosed into the Power Holding Company of Nigeria, PHCN, has entered its critical stage as 525 firms have been prequalified to either buy the distribution companies or participate in power generation.
The Bureau of Public Enterprises, PBE, disclosed that of the number, 253 and 272 bids were pre-qualified for distribution and generating companies respectively. The agency had harvested 929 bids for individual successor companies from 331 Expressions of Interest, EOIs, received from prospective investors.
The pre-qualified bidders were required to pay a $20, 000 fee for each company of interest and sign a confidentiality agreement before receiving bid documents and being admitted to the Data Room. At the end of the deadline for submission of bids by prospective investors, the Bureau of Public Enterprises (BPE) received 331 envelopes of Expressions of Interest (EOIs.) These were broken into 174 for generating companies and 157 for distributing companies. However, total number of individual bids for the successor companies increased to 929 when the 331 EOIs envelopes were opened and individual bids sorted out. The breakdown of the individual bids showed that 529 bids were submitted for distribution companies and 400 bids for generating firms.
The BPE developed evaluation criteria in accordance with the requirements of the EOI. It also considered a benchmark that would provide reasonable basis for prequalifying bids. A strong inter-agency team constituted the evaluation committee that undertook the assignment. It will be recalled that between December 13 and 20, 2010, BPE had published adverts in local and foreign media inviting prospective core investors to express interest in the eleven distribution companies unbundled from the Power Holding Company of Nigeria (PHCN.)The BPE also invited prospective core investors to express interest in the four thermal power stations and as concessionaires for the two hydro power stations. The initial deadline for receipt of EOIs was Friday, February 18, 2011.
But following representations by prospective investors who attended the five-country Electric Power Investors’ Fora which was to court world class investors to participate in the privatization of the successor companies, the Federal Government approved the extension of the deadline for the submission of EOIs to Friday, March 4, 2011.
The approval was granted by the Chairman of the National Council on Privatisation (NCP), Vice-President Sambo. The fora were held in Lagos (January 18-19, 2011); Dubai (January 24-25); London (January 27-28); New York (February 1-2); and Johannesburg (February 10-11.)
Potential bidders for the distribution companies are expected to be existing power distribution companies or core investor groups with power distribution companies as long-term technical partners.
Successful bidders 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 set out in the National Electric Power Policy (NEPP.)
As for the generating companies, potential bidders/concessionaires, who should be existing local and/or international power generators or investors with power generators as long-term technical partners, will be responsible for operating the stations, improving the generation capacity and making the necessary investments in line with the objectives of the Federal Government of Nigeria set out in the NEPP.