Preferred Bids Total $707 Million for Nigerian Power Stations

Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--Although controversy and scandal continues to whirl around the Nigerian government's plans to privatize the power generation and distribution sectors, the National Council on Privatization was on track when it announced five consortia as the preferred bidders for the Power Holding Company of Nigeria's (PHCN) successor power generation companies.

Eight companies bid a total of $707 million for the power plants: Geregu, for 434 megawatts (MW); Ughelli, for 832 MW; Sapele, for 1,020 MW; Shiroro, for 600 MW; and Kainji, for 760 MW.

Although there was some international participation, bidding consortiums consisted mainly of Nigerian companies. With an offer of $300 million, Ughelli Power plc won the bid for the plant of the same name. Amperion Power Distribution Limited won Geregu with a bid of $132 million. Chinese Nigeria Power Consortium was the winner of Sapele power plant with a bid of $201 million. North-South Power Company Limited won the Shiroro biding with $23.6 million, and Mainstream Energy Solutions won the Kainji bidding with $50.7 million.

Due diligence will now be carried out on the bidders by various government departments including the Economic and Financial Crimes Commission, the Nigerian Electricity Regulatory Commission and the Federal Inland Revenue Service. The final declaration of preferred bidders is still subject to NCP approval and cash-backing of the bidded amounts.

The NCP is committed to international best practices in the sale of the 17 PHCN successor companies. In all, 11 distribution companies and six generation companies are up for sale under the privatization program.

Out of the 23 bids that made it to the evaluation stage, 10 of them failed the first test of completeness and responsiveness. The remaining 13 bids were then subjected to full technical evaluation. Out of the 13 bids, eight scored the minimum 75% that was required to proceed to the next stage. The bidders were then asked to submit post-qualification bidders' guarantees following the approval of the evaluation results by NCP.

For related information, see July 13, 2012, article - Nigeria's Power Privatization Enters Final Phase.

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