Integrated Energy Distribution and Marketing – a firm promoted by former Head of State Gen. Abdulsalami Abubakar – yesterday lost out as the core investor in the Eko and Ikeja electricity distribution companies.
The company was named the core investor for four of the 10 electricity distribution firms (DISCOs) put up for sale by the National Council for Privatisation (NCP).
The two are the most lucrative of the firms.
But yesterday, when the NCP renamed the preferred bidders for the privatised firms, it gave only the Ibadan and Yola distribution firms to Integrated Energy Distribution and Marketing firm.
NCP Technical Committee chairman Mr. Atedo Peterside announced the preferred bidders in Abuja on behalf of the Federal Government.
Government also announced the preferred bidders of the electricity generation companies, bringing the privatisation of the power sector into a milestone.
There are stringent conditions for the preferred bidders.
New Electricity Distribution Company (NEDC/ICEPCO) is the preferred bidder for Ikeja Distribution Company. West Power and Gas is the preferred bidder for the Eko Distribution Company.
Vigeo Power Consortium, besides winning the Benin Disco, is the reserved bidder for Ikeja Disco. Its contender for Benin Disco – Southern Electricity Distribution Company – was disqualified for submission of multiple bids.
Oba Otudeko’s Honeywell Energy Resources International Limited is the reserve bidder for Eko Disco.
Sir Emeka Offor’s Interstate Electrics Limited beat Eastern Electric Nigeria Limited, owned by the five South eastern states, which was approved as the reserved bidder for the Enugu Disco.
The Afam Generation Company and Kaduna Distribution Company are yet to get preferred bidders.
The five generating companies also got preferred bidders.
The process, however, drew criticisms from some quarters.
At the sixth meeting of the council yesterday, successful bidders were given 15 days to make financial commitments through their banks.
The companies are expected to be handed over to the preferred bidders at the conclusion of the transaction within the next six months at which the companies are expected to have made full payment.
Besides, NCP disqualified Southern Electricity Distribution Company for submission of multiple bids for Benin Disco.
Amperion Power Distribution Company Limited with a bid of $132,000,000, is the preferred bidder for the core investor sale of 51% shares of Geregu Power Plc.
Mainstream Energy Solutions Limited, which offered an annual fee of $50,760,665.18 and a commencement fee of $257,000,000, is the preferred bidder for Kainji Hydro Power Plc.
For Shiroro Hydro Power Plc, NCP approved that North-South Power Ltd which offered an annual fee of $23,602,484.87 and a commencement fee of $111,654,534, is the preferred bidder.
The privatisation body also approved that Transcorp/Woodrock/Sumbion/Medea/PSL/ Thomassen with a bid of $300,000,000, is the preferred bidder for the Ughelli Power Plc.
Amperion Power Distribution Company Limited with a bid of $252,000,000 is the reserved bidder for the Ughelli Power Plc.
CMEC/EURAFRIC Energy JV Consortium is the preferred bidder for the Sapele Power Plc. It bidded $201,000,000.
JBN-NESTOIL Power Services Ltd, with a bid of $106,500,000 is the reserved bidder for the Sapele Power Plc.
Amperion is the preferred bidder for Geregu Power Plc. The Feniks Electricity Limited is the reserved bidder for Ughelli Power Plc, subject to their bid being revised to match the reserved price.
For the Distribution Companies (DISCOs) in which 60 % sales was approved, the preferred and reserved bidders are: Abuja Distribution Company: KANN Consortium Utility Company Ltd as preferred bidder; Benin Distribution Company: Vigeo Power Consortium as the preferred bidder;
Eko Distribution Company: West Power & Gas is the preferred bidder;
Honeywell was approved as the reserved bidder; Enugu Distribution Company: Interstate Electrics Ltd is the preferred bidder; Eastern Electric Nigeria Ltd was approved as the reserve bidder; Ibadan Distribution Company: Integrated Energy Distribution & Marketing Ltd is the preferred bidder;
NEDC/KEPCO was approved as the reserved bidder; Ikeja Distribution Company: New Electricity Distribution Company (NEDC)/KEPCO is the preferred bidder; Vigeo Power Consortium is the reserved bidder; Jos Distribution Company: Aura Energy Ltd as the preferred bidder
Kano Distribution Company: Sahelian Power SPV Ltd is the preferred bidder; Port Harcourt Distribution Company: 4Power Consortium is the preferred bidder; Yola Distribution Company: Integrated Energy Distribution & Marketing Ltd is the preferred bidder.
Peterside, with whom is Mrs. Bola Onagoruwa, Director General, Bureau for Public Enterprises (BPE), at the end of the council meeting which was presided over by Vice President Namadi Sambo, said the council also approved the next steps for the conclusion of the privatisation of the generation and distribution companies.
He said: “After the approval of the results of the financial bids by Council, the highest ranked bidder for each Generation or Distribution Company will be required to post an additional bid security (“Preferred Bidder’s Bank Guarantee”) in the form of a Letter of Credit or Bank Guarantee for 15 per cent (15%) of the transaction value within fifteen (15) business days of notification from the Bureau of Public Enterprises.
The Preferred Bidder’s Bank Guarantee shall be from a Standard & Poor (S&P) or Moody & Fitch “A” rated foreign bank with a correspondent bank in Nigeria or a Nigerian bank rated “A” by a Rating Agency approved by SEC and be valid through 21, calendar days after the stipulated proposal validity period or any extended proposal validity period.
“The designated Preferred Bidder will be invited for negotiations with BPE. Within 15 business days after signing of the Sale and Purchase Agreement, the Shareholders’ Agreement or the Performance Agreement ‘whichever is earlier, or at a mutually agreed earlier time, the Bidder shall make a down payment of 25% of the share purchase price.
“Within six months after signing of the Sale and Purchase Agreement or the Shareholders’ Agreement, whichever is earlier or mutually agreed upon time, the Bidder will be required to pay the outstanding 75% of the share purchase price to complete the transaction. Upon receipt of payment, the Preferred Bidder’s Bank Guarantee will be returned to the bidder within a maximum of four weeks.
“After the completion of payment, the handover of the successor company to the Preferred Bidder will conclude the transaction.”