By Anayo KorieGas supply challenges, has emerged as a hindrance to the sale of about 10 plants constructed under the National Integrated Power Projects to the Private sector the Bureau of Public Enterprises has said. The \power stations were owned by three tiers of government and built by Niger Delta Power Holding Company OF Nigeria (NDPHC)
The Head, Public Communications, BPE, Mr. Chigbo Anichebe, who confirmed the development in Abuja over the weekend said that BPE had not been able to sign Share Purchase Agreements with the prospective core investors in the power plants as a result of the failure to secure Gas Supply Agreements for the plants.
The plants are located in Alaoji, Benin, Calabar, Egbema, Gbarain, Geregu, Ogorode, Olorunsogo, Omoku and Omotosho. According to him, the absence of gas supply agreements was also affecting the conclusion of the sale of one of the successor companies of the defunct Power Holding Company of Nigeria, the Afam Power Plant.
He said that without securing gas supply, the prospective core investors would not be able to muster the financial resources to pay for the power plants.
"Without gas supply agreements, the plants are simply not bankable. It will not make sense to the banks to lend money to an investor who is not sure of gas supply in the next two years. It is expected that when they pay, they should start producing and selling power; but without gas supply, they cannot do this. That is why gas supply is critical to the transaction." he noted.
The 10 plants are jointly owned by the three tiers of government, with the Federal Government having 47 per cent equity stake and the local and state governments sharing the remaining 53 per cent. For the sale of the power plants, a Joint Technical Transaction Committee chaired by Governor Gabriel Suswam of Benue State was set up. NCP , NDPHC. and BPE on November 8, 2013 received 66 proposals from prospective investors interested in the NIPP plants.
The National Council on Privatisation and the Governing Board of the Niger Delta Power Holding Company had at their third joint meeting in March approved the opening of the financial bids of 42 prequalified bidders. The prequalified bidders met the criteria set in the Requests for Proposed sale.
After the financial bid opening held in March, core investors emerged for the 10 power plants but the NCP approved the bids for seven of the plants, while three were left pending the resolution of legal issues.