who bought the successor electricity
generation and distribution companies unbundled from the defunct Power
Holding Company of Nigeria, following the emergence of Maj.-Gen.
Muhammadu Buhari (retd) as President-elect.
The Federal Government had on November 1,
2013 handed over 17 power firms to private investors in a bid to
reverse the dwindling fortunes of the power sector.
The investors, according to an industry
source who partook in the privatisation process, are now concerned that
the Buhari-led government may shake up or upturn the privatisation
exercise carried out by the President Goodluck Jonathan administration.
“There is serious apprehension among the
private investors who bought the privatised power firms over the fate of
the assets they acquired, considering that a new government will take
over next month,” the source, who asked not to be identified, told our
correspondent.
But an energy law and policy expert, who
is also a Senior Associate at Banwo and Ighodalo, a Lagos-based law
firm, Mr. Ayodele Oni, believes that the Buhari regime will not upturn
the already concluded privatisation of the power sector.
“Upturning same is inviting economic
chaos and serious banking industry crisis as about 75 per cent of the
financing came from Nigerian banks, and in many of those instances,
almost outside their lending limits,” he said.
According to him, what the new administration may very likely do is to enforce the agreed performance thresholds and standards.
Oni said, “I believe the
Vice-President-elect, who is likely to oversee the power sector,
understands the nuances of the power sector and is, therefore, unlikely
to take that approach.
“The key issues the new government may
want to look at, in relation to the privatisation, are: whether the new
owners of the power companies are complying with the terms of the sale,
and in particular, whether every purchaser indeed completed payment, and
even more importantly, whether they are fulfilling their performance
obligations in terms of volume of power generated and the reduction of
aggregate, technical, commercial and collection losses.”
According to him, a transaction the
administration might, however, want to review is that relating to the
Enugu Distribution Company, and in particular, Prof. Bart Nnaji’s
Geometric.
“I expect the administration to continue
the reforms and to continue to implement the privatisation plan, with
adjustment to cater to the privatisation/aggressive improvement of the
grid, as the power value chain is only as strong as its weakest link
(currently the grid and gas supply),” Oni added.
He said more action needed to be taken in
relation to gas, adding that more support should be given to certain
individuals in the power and gas subsector who had performed well and
same should not be relieved of positions they currently occupied.
An energy expert and Technical Director,
Drilling Services, Template Design Limited, Mr. Bala Zakka, noted that
one of the key agendas of the incoming govern would be to tackle
corruption, but said, “As far as the power sector is concerned, we will
not expect the new government to just come and cancel or try to
denigrate what has been in place.”
He added that the incoming government
would, however, carry out a detailed audit of the privatisation process,
adding, “Our expectation is that the probing will be done for justice
and fairness.”
The Head, Public Communications, Bureau
of Public Enterprises, the agency in charge of the privatisation
exercise, Mr. Chigbo Anichebe, told our correspondent, “We don’t know
the cause of their (private investors) concern. Privatisation started in
1988 under Gen. Ibrahim Babangida and not one that I can recall has
been upturned.
“We have done privatisation, especially
of the power sector, transparently and it has been acclaimed by the
international community as one of the most transparent transactions ever
in the history of privatisation.
“So, I don’t know why they should be
concerned. What they need to do is to do their own part by investing
more and growing the sector.”
The Discos and their owners include Ikeja
Electric (NEDC/KEPCO Consortium), Jos Distribution Company (Aura Energy
Limited), Kano Distribution Company (Sahelian Power SPV Limited), Port
Harcourt Distribution Company (4Power Consortium), Yola distribution
Company (Integrated Energy Distribution & Marketing Limited), and
Abuja Distribution Company (KANN Consortium Utility).
Others are the Benin Distribution Company
(Vigeo Power Consortium), Eko Distribution Company (West Power &
Gas), Enugu Distribution Company (Interstate Electrics Limited), Ibadan
Distribution Company (Integrated Energy Distribution & Marketing
Limited) and Kaduna Distribution Company (Northwest Power Limited).
