Vanguard (Lagos)

16 January 2013

Nigeria: Power Privatization - FG Confirms Bank Guarantees

THE Federal Government Tuesday, confirmed the verification of all the bank guarantees provided by the preferred bidders for the Power Holding Company of Nigeria, PHCN, successor generation and distribution companies.

The verification of the guarantees thus prepares the bidders for the final stage of government's power privatisation exercise, which began since 1999.

The deadline for the receipt of the bank guarantees was Friday, November 23, 2012, at the end of which the National Council on Privatisation, NCP, confirmed that more than $33.58million worth of guarantees, representing 15 percent of the transaction value were received from the bidders for the distribution companies, DISCOs and the Generation companies, GENCOs.

The sum was spread as follows:

Discos submitted bank guarantees worth $188,476,306.00

Gencos submitted bank guarantees worth $147,378,680.15.

Confirming the verification of the guarantees in a statement made available to Vanguard, the Bureau of Public Entreprises, BPE, disclosed that by the bidders were now qualified to enter this last stage of the privatisation process, which had earlier been dogged with all sorts of controversies. Accordingly, the statement signed by Acting Director General of BPE, Mr Benjamin Dikki, indicated that the bidders were now free to enter into "the finalisation of negotiations with the Federal Government." The breakdown of the bidders is as follows:

DISCOs

1) Abuja Disco: Kann Consortium Utility Company Ltd - $24,600,000.00;

2) Benin Disco: Vigeo Power Consortium - $19,350,000.00;

3) Eko Disco: West Power and Gas - $20,250,000.00;

4) Enugu Disco: Interstate Electrics Ltd - $18,900,000.00;

5) Ibadan Disco: Integrated Energy Distribution and Marketing Ltd - $25,350,000.00;

6) Ikeja Disco: NEDC/KEPCO Consortium - $19,650,000.00;

7) Jos Disco: Aura Energy Ltd - $12,300,000.00;

8) Kano Disco: Sahelian Power Ltd - $20,550,000.00;

9) Port Harcourt Disco: 4Power Consortium - $18,636,306.00; and, 10) Yola Disco: Integrated Energy Distribution and Marketing Ltd - $8,890,000.00.

GENCOs

1) Shiroro Hydro Power Plc: North-South Power Ltd - $16,748,180.00;

2) Kainji Hydro Power Plc: Mainstream Energy Solutions - $35,680,500;

3) Sapele Power Plc: CMEC/EURAFRIC Energy Ltd - $30,150,000.00;

4) Geregu Power Plc: Amperion Power Distribution Limited - $19,800,000.15;

5) Ughelli Power Plc: Transcorp/Woodrock/Sumbion/Medea/PSL/ Thomassen - $45,000,000.00

Meeting with bidders

At a meeting with the bidders in Abuja earlier on Tuesday, Dikki, who assumed powers suddenly in November last year on the impromptu sacking of his predecessor, Bolanle Onagoruwa, told the bidders that the event was "a prelude to the commencement of finalisation of negotiations of transaction documents between the Federal Government and the preferred bidders. The end result of what we are starting today will be the execution of the transaction documents in a few days that will commence the process of eventual hand over of the successor companies to the core investors."

While insisting on government's determination to see the exercise through in "a few day", he also used the opportunity to remind the bidders that it was imperative for them to make a down payment of 25 percent of the share sales purchase price within "15 business

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