Quest Electricity Nigeria Limited, the new investor in Yola Electricity Distribution Company (YEDC) has taken delivery of the distribution company (DisCo) following the payment of N19 billion purchase fee and a commitment to invest another N28 billion (US$68 million) over a period of two years.
Director general of the Bureau of Public Enterprises (BPE,) Mr. Alex A. Okoh revealed at the signing ceremony of the Share Sale and Purchase Agreement (SSPA), which held in Abuja last Friday.
Recall that the National Council on Privatisation (NCP) had given approval for the privatisation of the YEDC and at the conclusion of a bidding process involving local and international investors, Quest Electricity Nigeria Limited emerged the preferred bidder with a bid price of N19 billion.
According to the director general, “this investment will be utilised for the purpose of carrying out an extensive upgrade of the company’s electricity distribution network, in order to bring the business to the level of financial viability. It is expected that this investment will deliver results within a period of five years”.
These include: Reduction in ATC & C losses from the current level of 80 per cent (which is the highest in the industry) to 29 per cent, this translates to a 51 per cent loss reduction); Growth in customer base from 396,650 to 596,650 (which represents a 50 per cent increase); and significant increase in energy supplied from 1,305 GWh to 1,714GWh (an increase of over 400 GWh (31 per cent increase).
Similarly, he said, as a result of the aggressive investment drive by the investor, “it is expected that the increase in energy supply will stimulate economic growth and development in this region through: the creation of new industries and opportunities; attracting much needed investment; and boosting job creation.
While noting the rigorous process of the negotiation which took place in the wake of the Covid-19 pandemic and its crippling impact on economic activities as well the challenging operational environment in the North East region of the country, Okoh said it is a testament to the commitment and doggedness of the parties to deliver on the transaction and the high collaborative spirit between the federal government and the Core Investor.
“Moreover, it is a clear indication that there is still a significant level of interest on the part of investors in the federal government’s reform and privatisation programme, notwithstanding the challenges in the power sector and the reaction that has trailed the privatisation process. This continued interest shows that the general government took the right decision in reforming the power sector.
Also speaking, the chairman of Quest Electricity Nigeria Limited, Alhaji Adamu Mele noted the insecurity in company’s area of franchise but assured that it would work round it to transform the distribution company within a short time through infrastructure upgrade.