A Review of the Nigerian Energy Industry

Govt signs share purchase agreements on Afam Genco, Kaduna Disco

Afam power station

14 January 2014, Abuja – The Federal Government and the preferred bidders for Afam Power Station in Rivers State and the Kaduna Electricity Distribution Company (KEDC) have completed negotiations for the Share Purchase Agreements (SPAs) for the two electricity assets unbundled from the defunct Power Holding Company of Nigeria (PHCN). 

THISDAY gathered from a source close to the Bureau of Public Enterprises (BPE), which negotiated on behalf of the Federal Government that the two preferred bidders – Taleveras Group for Afam and North West Power Consortium for Kaduna Disco had been given their letters confirming the signing of the SPAs.

He said the privatisation agency signed the SPAs for the sale of the two assets on behalf of the federal government.

The source said with the receipt of the letters by the private investors, the counting of the date for the payment of 25per cent of the price of the assets would start counting from the date of the receipt of the letters.

According to him, the two bidders will be expected to pay the balance of 75per cent, six months after the payment of 25per cent.

“They (preferred bidders) have been given their letters, confirming the signing of the Share Purchase Agreement (SPA). The payment of the 25 per cent will start counting for them from the date they received the letter,” he said.

He could not however confirm the date the letters were handed over to the preferred bidders and the spokesman of BPE, Mr. Chigbo Anichebe was not immediately available for comment on the issue at the weekend.

But according to the source, Taleveras Consortium, which emerged the preferred bidder for Afam Power Generation Company, consists of four consortia, including Alstom Nigeria Limited, which is registered in Nigeria, with supply, operation and maintenance of power turbines as the principal business.

He identified other members of the consortium to include Alstom Group, registered in France, with power generation and transport as principal business; Rivers State Government and Taleveras Petroleum Trading BV, registered in British West Indies, with physical trading of crude oil and refined petroleum products as principal business.

He noted that Alstom Nigeria Limited and Alstom Group provide technical support to the consortium, according to the bid documents submitted to the privatisation agency.

He recalled that during the privatisation of the assets of PHCN last year, no investor had emerged with the required technical qualifications to take up Kaduna Disco and Afam Genco. “So, a plan B had to be put in place where all the prequalified bidders were asked to re-bid. That was how these preferred bidders emerged,” he added.

With the completion of the negotiation of the sales purchase agreements, which have been executed, the new investors are now obligated to pay 25 per cent and then the balance of 75per cent in six months, according to the transaction structure.

– This Day

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