Reserve bidder, Yellowstone deposits $91m bond for Geregu plant

Geregu power plant26 May 2014, Abuja – Israeli firm, Yellowstone/Quantum Power Consortium which emerged reserve bidder to acquire the 506 megawatts Geregu thermal plant in the ongoing privatisation of power generation companies built under the National Integrated Power Projects framework has deposited $91.9 million bid bond to the NIPP privatisation secretariat.

This is coming on the heels of the new boost received by the power sector in far away Kigali, Rwanda with the sealing of a deal between the federal government and Export-Import Bank of India for a $100 million line of credit to finance power projects in Enugu, Kaduna and Delta states.

The $91.9 million bond deposit by Yellowstone/Quantum Power Consortium, which represents an initial 15 per cent payment required to secure its concrete stake in the sale of the power plant was reportedly paid by the consortium this week. It had initially placed a reserve bid worth $613 million for the plant at the official bids’ opening.

It was gathered that the power consortium is being backed by Israeli billionaire, Idan Ofer.

Ofer whose net worth is quoted by Forbes to be around $6 billion, ranking him the 239th billionaire in the world is the principal of Guernsey-based Quantum Pacific Group, and whose main interests include one of the world’s largest privately owned shipping groups, as well as a controlling stake in Israel Corporation, the largest public holding company on the Tel Aviv Stock Exchange.

Sources close to the NIPP privatisation transaction said that the consortium was invited by the joint transaction committee to activate its interest in the power plant, having exhausted the controversial deadline extension granted to the preferred bidder, Seoul Electric Power Limited.

Seoul Electric Power Limited which put in a bid price of $690.200 million for 506MW-Geregu plant had allegedly failed to meet up with the initial 15 per cent payment deadline which was equally allegedly extended by two more weeks.

Authoritative sources close to internal proceedings in the privatisation process that is overseen by the Niger Delta Power Holding Company (NDPHC) Ltd and Bureau of Public Enterprises, BPE, stated that Yellowstone/Quantum consortium made the payment within the week. They were however not specific on the particular date.

One of them stated: “I can confirm at least that the payment was made before the close of work on Friday. That done, they have expectedly toppled Seoul Electric Power Limited which could not meet up with the payment deadline albeit a controversial extension in the payment deadline by the joint transaction committee. “This consortium is backed by Israeli billionaire, Idan Ofer. They have also acquired a 23 hectare land space opposite Geregu-2 for the expansion of the capacity of the plant with the addition of another 1000MW plant. That done, you can see that they are in for serious business in Nigeria.”

Although, other preferred bidders for the other NIPP power plants who had made their initial 15 per cent payments were not disclosed, it was however learnt that a good number of them had responded to the payment deadline.

THISDAY had exclusively reported that the NDPHC had initially written to its managing board to grant approval for the extension of the 15 per cent initial payment deadline for three preferred bidders of its power plants.

The preferred bidders that were to benefit from the development included ENL Consortium Limited for the 754MW Olorunsogo plant with a bid price of $751.240 million; Seoul Electric Power Limited with $690.200 million for 506MW-Geregu plant and Daniel Power Consortium for 508MW-Ogorode power plant with a bid price of $531.777 million.

A letter seeking approval for 10-day deadline extension for the firms was submitted by the NDPHC to Vice President Namadi Sambo who heads the board of the company, shortly after it was discovered that the bidders had not made the mandatory payment at the expiration of the deadline which was never made public by the joint transaction committee.

It was then learnt that the reserve bidders for the plants – YellowStone Electric Limited for Geregu with $613 million, ESOP Power Limited for Ogorode with $510 million and Index Consortium for Olorunsogo with $730 million were willing to institute legal proceedings against parties to the transaction in view of its import on extant rules of the privatisation process.

The chairman of the Joint Transaction Technical Committee (JTTC) of the process, Governor Gabriel Suswan of Benue State had stated that the process which said was transparent from the onset, would continue to be until its conclusion.

Suswan also explained that the financial bids would be ratified in a matter of weeks by the board of the NIPP in conjunction with the JTTC, after which the preferred bidders will be invited to make their payments; he however did not give the time frame for the payment.

Meanwhile, a deal between the Federal Government and Export-Import Bank of India for $100 million line of credit to finance power projects in Enugu, Kaduna and Delta States was sealed in Rwanda yesterday.

The power projects include supply and commissioning of transmission lines; distribution of transformers in 96 communities in three senatorial zones of Enugu State and solar mini grid electrification and solar street lighting in Kaduna and construction of a 2 x 26 MW gas-based power plant in Cross River State.

The agreement for the line of credit was signed by the Coordinating Minister of the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala (for the Federal Government) and Mr. Yaduvendra Mathur on behalf of EXIM Bank, on the sidelines of the 49th Annual Meeting of the African Development Bank Group.

This is the first line of credit by the Indian EXIM Bank to the Federal Government. Under the condition of the line of credit, it would reimburse 100 per cent of contract value to the Indian exporters, upfront upon the shipment of equipment and goods/provision of services.

Okonjo-Iweala said: “I’m pleased that we were able to get this done. This is a historic first. This is the beginning. I think at some stage, we can have this kind of discussion of a relationship in the future. That will be very good.”
*Chineme Okafor & Kunle Aderinokun-Thisday

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