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Released June 06, 2013 | JOHANNESBURG
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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--More than 40 local and international companies and independent investors are competing to take control of 10 new gas-fired power plants that the Nigerian government is putting up for sale in its privatization drive. This is a central element in the drive to end power shortages, which are hobbling the growth potential of Africa's resource-rich and most populous nation.
On Tuesday this week in the commercial capital Lagos, at a road show launching the sale process, the government announced that it is privatizing 10 independent power plants built by the Niger Delta Power Holding Company (NDPHC) under the National Integrated Power Project (NIPP).
The road show also will visit the U.K., U.S. and Hong Kong. The total combined power generation capacity of the 10 plants is 5,000 megawatts (MW). The revenue anticipated from the sale is to be used to build additional power plants and boost the country's power transmission network. Six of the plants are at the stage of "technical" completion, with the other four scheduled to reach that stage by the end of 2013.
Minister of Power Chinedu Nebu said that the government would divest 80% of its share in the power plants, which will be auctioned through the bureau of public enterprises (BPE).
Arid Mohiuddin, the transaction adviser to the sale process, said that submission of bids for the plants was scheduled for July 19, and August 8 was the date for short-listing bidders. There will be a bidders' conference on September 18 and 19. Bidders are expected to submit their proposals on November 8, and the evaluation of technical proposals will follow in December.
Mohiuddin gave assurance that the plants would not be handed over until they were completed and commissioned.
The power plants up for sale are Omotoso (450 MW), Sapele (450 MW), Geregu (434 MW), Olorunsogo (750 MW), Ihovbor in Edo (450 MW), Gbarain (225 MW), Alaoji (450 MW), Calabar (561 MW), Egbema (338 MW) and Omoku (225 MW).
With up to $20 billion being wasted, mismanaged and/or "disappeared" in Nigeria's power project sector over the past decade, there is a good deal of skepticism surrounding the prospects of closing the power gap. After claiming an output of 4,500 MW at the end of 2012, the actual output fell back below 3,000 MW. The privatization scheme will only work if it is handled by commercially driven industry professionals.
In mid-May, Ngozi Okonjo-Iweala, Coordinating Minister for the Economy and Minister of Finance said, "Privatization does not always work in Nigeria. However, our government is not competent to run the energy sector. We tried it for 40 years!" She said this at the launch of her book "Reforming the Unreformable."
For related information, see February 5, 2013 -- Jeff Immelt Signs GE for $ 1 Billion Manufacturing and Power Projects in Nigeria, and May 29, 2013, article - Strings Attached to African Development Bank's $500 Million Loan for Nigerian Transmission.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
On Tuesday this week in the commercial capital Lagos, at a road show launching the sale process, the government announced that it is privatizing 10 independent power plants built by the Niger Delta Power Holding Company (NDPHC) under the National Integrated Power Project (NIPP).
The road show also will visit the U.K., U.S. and Hong Kong. The total combined power generation capacity of the 10 plants is 5,000 megawatts (MW). The revenue anticipated from the sale is to be used to build additional power plants and boost the country's power transmission network. Six of the plants are at the stage of "technical" completion, with the other four scheduled to reach that stage by the end of 2013.
Minister of Power Chinedu Nebu said that the government would divest 80% of its share in the power plants, which will be auctioned through the bureau of public enterprises (BPE).
Arid Mohiuddin, the transaction adviser to the sale process, said that submission of bids for the plants was scheduled for July 19, and August 8 was the date for short-listing bidders. There will be a bidders' conference on September 18 and 19. Bidders are expected to submit their proposals on November 8, and the evaluation of technical proposals will follow in December.
Mohiuddin gave assurance that the plants would not be handed over until they were completed and commissioned.
The power plants up for sale are Omotoso (450 MW), Sapele (450 MW), Geregu (434 MW), Olorunsogo (750 MW), Ihovbor in Edo (450 MW), Gbarain (225 MW), Alaoji (450 MW), Calabar (561 MW), Egbema (338 MW) and Omoku (225 MW).
With up to $20 billion being wasted, mismanaged and/or "disappeared" in Nigeria's power project sector over the past decade, there is a good deal of skepticism surrounding the prospects of closing the power gap. After claiming an output of 4,500 MW at the end of 2012, the actual output fell back below 3,000 MW. The privatization scheme will only work if it is handled by commercially driven industry professionals.
In mid-May, Ngozi Okonjo-Iweala, Coordinating Minister for the Economy and Minister of Finance said, "Privatization does not always work in Nigeria. However, our government is not competent to run the energy sector. We tried it for 40 years!" She said this at the launch of her book "Reforming the Unreformable."
For related information, see February 5, 2013 -- Jeff Immelt Signs GE for $ 1 Billion Manufacturing and Power Projects in Nigeria, and May 29, 2013, article - Strings Attached to African Development Bank's $500 Million Loan for Nigerian Transmission.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
