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 N105.3bn (about US$343.6m) and Diamond Stripes Consortium as the reserve bidder with a price of N102.3bn.
This was one of the major decisions taken by the Council, chaired by the Vice President and Chairman of Council, Professor Yemi Osinbajo at the 2nd Meeting of the NCP for 2019 held at the Presidential Villa, Aso Rock, Abuja on Monday, October 14, 2019.
It noted that the winning bid of US$343.6m for the power plant is above the winning bid of US$265m in the previous privatisation transaction conducted in 2013; and that Transcorp Power Consortium (preferred bidder) plans to invest US$350m 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 US$62m) which is above the US$59m paid by the previous core investor in 2013.
It would be recalled that Council at its first meeting for 2019, held on Friday, April 12, 2019 at the Presidential Villa, Aso Rock, 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 1st Meeting of 2017 held on 22nd and 23rd August 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 North-East 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.