Abuja — Twenty four hours after President Goodluck Jonathan approved payment of N384billion for the settlement of outstanding benefits of Power Holdings Company of Nigeria, PHCN, staff, the Federal Government Thursday signed transaction and industry agreements with successor companies to PHCN, formally marking the final take off of reforms of the electricity generation and distribution industry.
Minister of Power, Prof. Chinedu Nebo, who signed on behalf of the chairman of the National Council on Privatization NCP, Vice President Namadi Sambo said the first set of agreements is on power purchase between the Nigeria Bulk Electricity Trading Company Ltd "Bulk Trader" and six legacy power plants.
The Nigeria Bulk Electricity Trading Company is designed to provide a credible and credit worthy platform for the take off of the succeeding companies to the PHCN pending the attainment of sustainable liquidity of the distribution companies.
Prof. Nebo explained that NBET on its part also signed vesting contracts with the 11 distribution companies.
Some of the distribution companies that signed the agreement with NBET include, Kann Cosortium, handling the Abuja power plant, Vigeo Power consortium (Benin), West Power $ Gas (Eko), Interstate Electric Ltd (Enugu), Integrated Energy and NEDC/KEPCO in charge of Ikeja.
According to him, the agreements also included gas supply and aggregation between Geregu, Sapele, Ugheli power plants and their respective gas suppliers, as well as the agreements between generating companies and the Transmission Company of Nigeria PLC, which is expected to pave way for compensation to providers of services such as black start, spinning reserve and frequency support.
Among the generating companies recently approved by the NCP are Amperion handling Geregu, Mainstream for (Kainji), North South (Shiroro) Transcorp/Woodrock (Ughelli) and CMEC/Eurafric for Sapele.
Chairman of the technical committee of the NCP, Mr. Atedo Peterside said the successor companies are expected to within 15 business days after the signing of the sale and purchase agreement or the shareholder's agreement, whichever is earlier, make down payment of 25 percent of the share purchase price while they are also required to pay the outstanding 75 percent the share purchase price withing 90 days.
In his remarks, the Acting Director General of the Bureau for Public Enterprises BPE, Mr. Benjamin Dikki revealed that all the successor companies would meet with the bureau to finalize arrangement that gives them comfort without their taking over before full payment.
He assured that government was also making concrete arrangement to ensure adequate funding of the TCN to improve its capacity to evacuate power to give the generating and distribution companies the confidence to operate effectively.