A Review of the Nigerian Energy Industry

Zambian firm bids for Nigerian power companies


4 October 2011, Sweetcrude, Johannesburg – Zambia’s power distributor, Copperbelt Energy Corporation (CEC), is bidding for two of Nigeria’s power distribution firms scheduled for privatisation. It plans to borrow to fund the purchase.

The distribution arm of the Power Holding Company of Nigeria has been split into 11 different units valued at about $100 million each.

The consortia that CEC is in have been shortlisted to buy at least two of them, a senior official of the company told Reuters on the sidelines of an investor conference in Johannesburg.

Nigeria’s power sector reform is aimed at improving efficiency and cutting persistent electricity outages.

Besides the Zambian company’s interest, Ghana’s Volta River Authority (VRN) and the Kenya Electricity Generation Company have also expressed interest in bidding for some power generation firms.

VRN is bidding for three hydro stations – Shiroro, Kainji and Jebba – slated for concession; while KenGen had also signified interest in Afam, Geregu, Sapele and Ughelli thermal power plants.

“We still have some leverage on our balance sheet. We can raise some money through the balance sheet and then we can do a rights issue depending on how good the deal is,” CEC’s Director of Corporate Finance, Mutale Mukaka, said.

“The first call is the balance sheet, and thereafter, if we need more, we can leverage it through bringing in more equity in the business,” he added.

Mukuka said that the CEC also expected electricity demand to exceed the pre-crisis level of 540 megawatts in at least 18 months as new mines come on stream and existing operations expand.

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