A Review of the Nigerian Energy Industry

Nigeria to open new bids for PHCN successor companies

Oscarline Onwuemenyi

20 February 2012, Sweetcrude, ABUJA – The Bureau for Public Entrepreneurs, BPE, has announced that the bids of prospective investors for the privatisation of the successor companies created from the Power Holding Company of Nigeria (PHCN) will take place between September 25, 2012 and October 10, 2012.

According to the revised bid timeline issued to investors by the privatisation agency, the announcement of the preferred bidder for the 17 successor companies by the National Council on Privatisation (NCP) will be made on/or before October 23, 2012.

Indeed, the Bureau will issue revised legal documents to the bidders on March 30, 2012 while April 20, 2012 is the deadline for receipt of comments by bidders on the legal documents.

The distribution/issuance of final bid documents is on May 11, 2012. The deadline for submission of technical and financial bids is July 31, 2012.

The revised transaction timeline reveals that the evaluation of the technical bids will take place between August 14 and 28, 2012. The NCP will approve the results of the technical evaluation on/or before September 11, 2012.

The deadline for the shortlisted bidders for generation companies to submit their letters of credit is September 18, 2012 while October 2, 2012 is for shortlisted bidders for distribution companies.

The NCP approval will pave way for the opening of financial bids of the shortlisted investors.

In a letter to the prospective investors, the Acting Director (Electric Power) at the BPE, Mallam Ibrahim Babagana, explained that the revision to the transaction timetable became imperative in order to address the concerns raised at the Transaction and Industry Review Conference which was held in Abuja on November 28 and 29, 2011.

According to him, “In view of the foregoing, we have been working diligently to create a bankable package of transaction and industry documents based on your feedback.

“Specifically, we have been working with other agencies such as the Federal Ministry of Power; Federal Ministry of Finance; Nigerian Electricity Regulatory Commission (NERC); Transmission Company of Nigeria(TCN); Gas Aggregation Company of Nigeria (GACN); Nigeria Gas Company (NGC); Nigerian Bulk Electricity Trading Company (NBET); and the World Bank to amend and harmonise the key industry documents, namely, MYTO (Multi-Year Tariff Order) 2, Transmission Use of System Agreement(TUoS), Connection/Interface Agreement (CIA),Gas Sale and Aggregation Agreement (GSAA), Gas Transportation Agreement (GTA), Power Purchase Agreement (PPA), and Vesting Contract.”

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.

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