FG Finalises Bid Process To Sell 5 Power Plants For $1.15bn – Adelabu

The federal government has concluded the sale of five power plants under the National Integrated Power Projects at a cost of about $1.15 billion.

Minister of Power, Adebayo Adelabu, who revealed this in Lagos, yesterday, said the bidding process had been finalised and a final report submitted to the National Council of Privatisation (NCP) which has Nigeria’s Vice President Kashim Shettima, as chairman.

Speaking at the BusinessDay “Powering Nigeria’s Energy Future: Addressing Infrastructural Challenges for Sustainable Energy Development” Conference, Adelabu also said a full-scale metering of all unmetered Band A electricity customers before the end of September is ongoing.

It was gathered that the Omotosho plant, which has four power-generating turbines, would be sold at about $85 million; while the Olorunsogo National Integrated Power Project (NIPP) with also four turbines would cost $170 mIllion.

In December 2022, BusinessDay reported the federal government and the 36 state governors agreed to sell five power plants under the National Integrated Power Projects and use the proceeds to fund the 2023 budget.

The agreement came after over two years of disputes and legal tussles regarding the sale of the NIPP plants managed by the Niger Delta Power Holding Company (NDPH).

Former director general, Bureau of Public Enterprises Alex Okoh, had disclosed the agreement between the Federal Government and the states regarding the NIPP plants to journalists in Abuja during an interview. The disclosure was, however, opposed by various groups.

There have been discussions and plans for the sale of the NIPPs by the Bureau of Public Enterprises for several years, with the specific details and target sale amount evolving over time.

In April 2021, the National Council on Privatisation approved the sale of five NIPPs through a fast-track strategy. The estimated value of these five plants was not publicly disclosed at the time.

In March 2022, the Nigerian National Petroleum Corporation expressed interest in acquiring some NIPPs, indicating continued progress with the sale.

In December 2022, the former BPE boss, Okoh, confirmed an agreement between the Federal Government and states for the sale of five NIPPs.

Speaking on metering, Adelabu, said there was an accrued N20 billion for metering and a plan is in the works with stakeholders to procure meters for these customers.

“We are releasing N20 billion for the electricity distribution companies to procure meters for the unmetered Band A customers before the end of September.”

Band A customers are those who receive 20-24 hours of electricity supply daily.

The Nigerian Electricity Regulatory Commission (NERC) announced the new rates see a jump from N66/N77 per kilowatt-hour to a significant N225 kWh in April, citing that the newly approved tariffs will reduce subsidies for 2024 by about N1.14 trillion.

The Commission, in January 2024 had estimated that the federal government would pay N1.6 trillion on electricity subsidy in 2024 fiscal year.

Also, more than seven million electricity customers in Nigeria are unmetered, according to data by the Commission and the National Bureau of Statistics.

“The government has put in place the required framework to enable an injection of 1.5 million meters into the power sector through the World Bank Distribution Support Recovery Program.

“The Presidential Metering Initiative will ensure an additional 2 million meters will be procured annually for 5 years. This will ensure accurate billing, reducing revenue loss and improving cash flow for a more liquid power sector,” Adelabu added.