17 July 2012

Nigeria: BPE Opens Bid for PHCN Firms

The Bureau of Public Enterprises (BPE) yesterday opened the bid for the takeover of the successor companies from the unbundling of the Power Holding Company of Nigeria (PHCN).

This is in line with the revised timeline released earlier by the BPE for the privatisation of the successor companies of PHCN.

The minister of power, Professor Barth Nnaji, had last week said the federal government would also sign a Memorandum of Understanding with Canada-based Manitoba Hydro International Limited for the management of the Transmission Company of Nigeria.

Details of the bid, however, remained sketchy as the BPE maintained that this was an in-house bid.

According to BPE timeline for the sale of PHCN, the harvest of the bidders' technical and financial proposals has today as deadline for generation companies and July 31, 2012, for distribution companies.

The BPE had, in May, released the final industry and transaction documents to the 152 potential investors interested in the privatisation exercise. The 13 bid documents were sent to the potential investors on May 11, 2012.

The transaction documents were: Share Sale Agreement, Shareholders Agreement, Performance Agreement, and Concession Agreement, while the industry documents were Gas Sale and Aggregation Agreement, Gas Transportation Agreement; Bulk Power Purchase Agreement (Thermal, Bulk Power Purchase Agreement (Hydro), Vesting Contract, Transmission Use of System Agreement; Grid Connection Agreement, and Ancillary Services Agreement.

On March 30, 2012, BPE issued the revised industry and transaction documents to the bidders, informing them of its expectations to receive all comments on the documents by April 20, 2012. In the wake of bidders' feedback, another meeting of all industry stakeholders was held in Abuja on May 5 and 6, 2012, to finalise the bidding documents.

The next stage of the privatisation exercise is the harvest of the bidders' technical and financial proposals which has July 17, 2012, as deadline for generation companies and July 31, 2012, for distribution companies.

The transaction timeline reveals that the evaluation of the technical bids will take place between August 14 and 28, 2012. The National Council on Privatisation (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.

Consequently, NCP's approval will pave way for the opening of financial bids of the shortlisted investors.

The BPE would, between September 25 and October 10, 2012, open the financial bids of prospective investors for the privatisation of the successor companies.

The announcement of the preferred bidder for the 17 successor companies by the NCP will be made on or before October 23, 2012.

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