Transcorp wins Afam power station with $343.6m

Business

The National Council on Privatisation (NCP) has approved Transcorp Power Consortium as the preferred bidder for the Afam Electricity Generation Company (Afam Power Plc and Afam Three Fast Power Limited) with a bid price of N105.3billion (about $343.6million) and Diamond Stripes Consortium as the reserve bidder with a price of N102.3billion.

It was one of the major decisions taken by the Council chaired by the Vice President and Chairman of Council, Prof Yemi Osinbajo, at the second meeting of the NCP for 2019, held at the Presidential Villa, Aso Rock, Abuja.

A statement from the Bureau of Public Enterprises (BPE) Head, Public Communications, Amina Othman, said the winning bid of $343.6million for the power plant is above the winning bid of $265million in the previous privatisation transaction conducted in 2013. It added that Transcorp Power Consortium (preferred bidder) plans to invest $350million in the firm over a period of five years after take over.

Council also approved Quest Electricity Nigeria Limited as the preferred bidder for the re-privatised Yola Electricity Distribution Company (YEDC) with a bid price of N19bn (about $62million) which is above the $59million paid by the previous core investor in 2013.

The Council had at its first meeting for 2019, at the Presidential Villa,  Abuja,  granted approval to Diamond Stripes Consortium, Transcorp Power Consortium and Unicorn Consortium to proceed to the financial bids opening stage for the acquisition of 100 percent shares in the Afam Electricity Generation Company (Afam Power Plc & Afam Three Fast Power Limited), having met the benchmark score of 750 points after evaluation in accordance with the criteria set out in the Requests for Proposal (RfPs).

It also directed Quest Electric Nigeria Limited to proceed to the financial bids opening stage for the re-privatisation of the Yola Electricity Distribution Company (YEDC).

Recall that the privatisation of Afam Electricity Generation Company could not be concluded during the first round of the power privatisation in 2013 due to issues stemming from gas supply to the plant.

Following the termination of the Share Purchase Agreement (SPA) signed between Taleveras (the then Preferred  Bidder) and BPE in 2016, Council at its first meeting of 2017, approved the privatisation of the enterprise based on a strategy to be recommended by the Transaction Advisers.

For the YEDC, although it was successfully privatised and handed over to the core investor in 2013, a force majeure was declared in 2015 by the core investor citing insecurity in the Northeast region of the country. Following this, the company was duly repossessed by the Federal Government.

It is expected that the successful bidders will be responsible for operating the generation and distribution companies, making the necessary investments to improve the generation and distribution networks and customer service in line with the objectives of the Federal Government of Nigeria set out in the National Electric Power Policy.

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