Over 100 bids for Nigerian power plants

The government of Africa’s second-largest economy has attracted enormous interest as it seeks to lure private capital into its power industry.

More than 100 bidders have responded to an Expressions of Interest (EoI) process that was launched by the Nigerian government and which gives private investors the chance to buy shareholdings in ten thermal power plants in the country.

The process, which is part of a wider privatisation programme, “could generate several billions of US dollars” according to a press release which said that the EoI had concluded towards the end of July with 110 bids received.

The sales process is being overseen by the Niger Delta Power Holdings Company (NDPHC), a special purpose company set up by the government in 2005 to implement the National Integrated Power Project (NIPP). The NIPP aims to add new generation, transmission and distribution capacity and address Nigeria’s chronic electricity supply shortfall.

Anthony Muoneke, executive director (finance and administration) at the NDPHC, hailed a “tremendous vote of confidence by the international investment community for the Federal Government of Nigeria’s declared policy to increase private sector involvement in the electricity industry”.

The ten power plants are currently part of a wholly owned subsidiary of NDPHC, with 80 percent of outstanding shares being offered for sale. Five of the plants are either fully or partly operational, with the remainder due to be operational by mid-2014.

The ten plants will generate a combined 5,000 megawatts once operational. Each will benefit from a contract structure covering the sale of electricity, the supply and transportation of natural gas and access to the electricity transmission network.

The minimum equity participation requested of bidders is either $100 million or $200 million, depending on the size of the plant they are bidding for.

The NDPHC is due to draw up a shortlist of bidders later this week. These bidders will then receive a Request for Proposal with a deadline of November this year.