Vice President Namadi Sambo has said that the stage was now set for the handing-over of the successor companies of Power Holding Company of Nigeria (PHCN) to their preferred bidders on Monday. This followed the successful payment of their bid prices. Also yesterday, it was disclosed that a total of about $3.3 billion was expected to accrue to Federal Government's coffers as proceeds from the sale of successor generation and distribution companies created from the unbundling of PHCN. Speaking on Friday in Abuja at a special forum on "Financing the Power Sector Reforms for Economic Development", which was organised by the CBN, Sambo also said all payments of severance package including pension and gratuity to over 47,000 PHCN workers should have been completed yesterday to allow for a smooth transition of the privatisation exercise. Vice-president Sambo noted that the Federal Government, through the Nigerian National Petroleum Corporation (NNPC), the Nigeria Gas Company and the private sector was implementing a robust programme for the realisation of the gas master plan with specific interest to meet the gas to power demand in the country at the cost of $8 billion. He said already, the sum $500 million of the $1 billion Euro bond would be utilised as counterpart funding for the implementation of the project.
Sambo said beginning from 2015, the country was expected to generate about 20,000MW of electricity within the four to five-year programme when the hydro power projects would be delivered. Noting that government would continue to attract investment and create a conducive environment for private participation in the power sector, he added added that government was undertaking an extensive programme of upgrading and expansion of power transmission capacity to transmit up to 10,000MW by 2014 and 20,000MW by 2016. He put the total funding for the project at about $3.7 billion adding that the sources of funding had already been arranged as $1.6 billion would come from the sales proceeds of NIPP and Niger Delta power holding company with 10 new power plants. It also emerged Friday that the Central Bank of Nigeria (CBN) provided all the financing deployed in the entire privatisation process of the PHCN assets. Governor of the Central Bank of Nigeria (CBN), Mallam Sanusi Lamido Sanusi, disclosed that the apex bank had provided a $10 million-grant to the Bureau of Public Enterprises (BPE) to finance the entire privatisation process. Sanusi said the apex bank had in the interim, also provided long-term, fixed single-digit funds for power investment by manufacturers. He said a total of N109 billion had been extended to 20 companies. He said the CBN recent intervention in the power sector had added about 500 megawatts of electricity generation capacity to the country and that government would have to intensify efforts at incentivising the sector in order to attract more funding to the power sector. Also, the African Finance Corporation (AFC) which is the technical adviser to the CBN said it had disbursed a total of N226 billion to projects in both the aviation and power sectors in its interventions-with N110 billion going into 23 unique power projects which were financed by 11 banks.
The AFC said seven other projects valued at about N12 billion were awaiting disbursement from six other banks. It said almost 800MW of power had been financed to date, representing about 25 per cent of the entire national Grid.
It was also disclosed that about $2.13 billion was received by the Federal Government from preferred bidders for the privatised power assets as at the expiration of the August 21 payment deadline.
Altogether, a grand total of $3.3billion is expected to accrue to government coffers from the sale. Chairman, Technical Committee, National Council on Privatisation (NCP), Mr. Atedo Peterside, explained that by the payment deadline private sector core investors had paid a total of $1.13 billion for 60 per cent equity controlling stakes in nine distribution companies (DISCOs) including, Abuja, Benin, Eko, Ibadan, Ikeja, Jos, Kaduna, Port-Harcout and Yola. Peterside said that the primary purpose of privatising the PHCN companies was not just to
transfer the power assets but to bring into play new owners with "deep pockets" who could finance and/or access financing for the rapid restoration of lost capacity and/or add significant new capacity to make up for decades of government neglect and mismanagement. To this end, he explained that Nigeria has a current available capacity of 2,692 megawatts (MW) as against a total installed capacity of 6,976.40 MW, adding: "Financing the necessary capex to fund this incremental 4,284.4 MW that
is required to achieve full capacity will cost an additional $4.28 billion.
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