So much have been written about the sale of the power distribution companies (discos) that are been privatized by the Federal Government yet rather than understand the process most people (like me) even get more confused. For that reason I decided to get the details and help my readers (and myself) understand who bidder for what and how some bidders became preferred bidders.
According to the website of the Presidential Task Force for Power, Distribution in a nutshell can be described as the “downstream” sector of the electric power industry. It involves delivering power directly to homes and industries. Lines and transformers of much lower capacity (ranging from 33KV/415V to 11 KV/415 V) are used in the distribution sector. The distribution aspect of electricity also directly involves dealing with the consumer and overseeing such functions as meter installation, billing for power consumed and revenue collection. Distribution firms purchase the power they deliver to consumers from power generating firms/plants that are separate firms. The Power Plants will cut off supply to the discos once they cannot pay for generated power delivered to them. This ensures the distribution companies put in place robust systems for receiving payments from consumers. It is for this reason that the sale of the power discos must be to the bidder with the most technical ability to deliver. It is not simply about their ability to pay the highest bid sum as in the case of the power plants.
What and who is the FG Selling to
The Federal Government is selling a 60% stake in the 10 Power Distribution companies currently earmarked for sale. The Federal and State Government both share ownership of 40% of the remaining equity. A total of 54bidders met the July 31 deadline from about 80 for submission of technical and financial proposals for the privatization of the eleven distribution companies created from the unbundling of Power Holding Company of Nigeria (PHCN). From there the following were shortlisted;
PLS SCROLL BELOW FOR UPDATED LIST OF APPROVED WINNERS OF THE BIDS
The FG and States is therefore going to make about $1.2billion dollars from a 60% stake of the sale of equity in the discos. Whilst the figure seem impressive it is difficult to estimate how much profit the FG will be making on the disposal of the discos considering how much has been spent and lost to corruption in the past. They also seem to have used Depreciated Replacement Cost of Assets as determined by MYTO in estimating the value of the discos.
Criteria for Selection of Preferred Bidders
For what I understand the preferred bidders are selected based on their ability to show the most average technical, commercial and collection (ATC&C) loss reduction projection or efficiency ratio over a 5year period . This basically means, a bidder who shows the most ability to reduce the most technical and non-technical losses when power is being distributed will be chosen. For example, when power is generated and transferred between distribution lines energy that ought to have been consumed is lost before getting to the transformers. Further energy is also lost from the transformers as it is passed on to the ultimate consumers. This energy losses are non uncommon and is also peculiar in other developed economies.
This losses in energy end up being a loss in revenue which would have been gained had it being captured and consumed by the end user. Also, non-technical losses for example refer to customers who consume electricity but do not get billed or do not just pay for bills for various reasons. Examples are villages and areas that PHCN does not even get to or people who are able to consume power but do not pay as they do not have meters. Therefore, the ability for the bidder to reduce this loss the most will result in more revenue for the discos and off course better value for tax payers. It is based on this that preferred bidders are shortlisted.
From what I saw on TV during the bid process, no bidder can have more than two discos and eventual winners will have to demonstrate realistic capacity to reduce these losses as proposed.
This in a nutshell is the A-Z of the power discos. For more information, follow all the links embedded in the post above and off-course as I learn more I will update accordingly. Updated Information (News Article)
Technical Committee on Privatisation, Mr Atedo Peterside, announced that under generation companies, NCP approved that Amperion Power Distribution Company Limited, with a bid of USD$132,000,000 was the preferred bidder for the core investor sale of 51% shares of Geregu Power Plc.
It also approved that Mainstream Energy Solutions Limited, which offered an annual fee of USD$50,760,665.18 and a commencement fee of USD$257,000,000, was the preferred bidder for the concession of Kainji Hydro Power Plc.
NCP approved that North-South Power Ltd, which offered an annual fee of USD$23,602,484.87 and a commencement fee of USD$111,654,534, was the preferred bidder for the concession of Shiroro Hydro Power Plc.
The privatisation body also approved that Transcorp/Woodrock/Sumbion/Medea/PSL/ Thomassen, with a bid of USD$300,000,000, was the preferred bidder for the core investor sale of 100% shares of Ughelli Power Plc.
NCP also approved that Amperion Power Distribution Company Limited, with a bid of USD$252,000,000, was the preferred bidder for the core investor sale of 100% shares of Geregu Power Plc.
NCP approved that CMEC/EURAFRIC Energy JV Consortium, with a bid of USD$201,000,000, was the preferred bidder for the core investor sale of 100% shares of Sapele Power Plc.
NCP similarly approved that JBN-NESTOIL Power Services Ltd, with a bid of USD$106,500,000, was the bidder for the core investor sale of 100% shares of Sapele Power Plc.
For the distribution companies, which are being privatised 60 %, the NCP approved KANN Consortium Utility Company Ltd, Abuja Distribution Company, Vigeo Power Consortium for Benin Distribution Company, West Power & Gas for Eko Distribution Company and Interstate Electrics for Enugu Distribution Company.
Others are Integrated Energy Distribution & Marketing Ltd for Ibadan Distribution Company, New Electricity Distribution Company (NEDC)/KEPCO for Ikeja Distribution Company, Aura Energy Ltd for Jos Distribution Company, Sahelian Power SPV Ltd for Kano Distribution Company, Sahelian Power SPV Ltd for Port Harcourt Distribution Company and Integrated Energy Distribution & Marketing Ltd was approved as the preferred bidder for Yola Distribution Company.
Nigerian Governors who have tested positive for Coronavirus
Six Nigerian governors have contracted the novel coronavirus, but some have recovered.
On Saturday, July 4, Ebonyi State Governor, David Umahi announced that he had tested positive for COVID-19. This makes him the 6th Governor to have tested positive for the virus that has infected over 11 million and killed no less than 532,000 people globally.
Kaduna State Governor, Nasir El- Rufai was the first governor confirmed to have been infected and recovered in April.
Bauchi State Governor, Bala Mohammed, was also infected in March and was reported to have recovered on the 9th of April.
Oyo State Governor, Seyi Makinde, announced that he tested positive on 30th, March, 2020 and his recovery was reported on the 5th of April.
Ondo State Governor, Rotimi Akeredolu, tested positive last week on June 30th and Delta’s Ifeanyi Okowa announced that he and his wife had tested positive on July 1.
So far, the governors who have tested positive for COVID-19 are:
1. Nasir el-Rufai
2. Bala Mohammed
3. Seyi Makinde
4. Rotimi Akeredolu
5. Ifeanyi Okowa
6. David Umahi
Earlier this weekend, Benue State Governor, Samuel Ortom announced that his wife, Mrs. Eunice Ortom, their son, and some of the wife’s aides had tested positive for COVID-19.
With Nigeria and the rest of the world still battling to contain the dreaded virus, the total number of confirmed cases has risen to 28,167 from 148,188 tests carried out as at Saturday, July 4, 2020. In addition, while 11,462 have recovered, 634 persons have died.
BUA cement to build power and cement plants in Adamawa state
BUA Cement’s newest plant in Sokoto is expected to be operational in 2021.
BUA Cement has announced plans to build a 50 megawatts power plant and 3 million metric tonnes cement plant in Lamurde and Guyuk local governments in Adamawa States.
BUA Cement which is Nigeria’s second-largest cement producer by volume with plants in Sokoto and Edo States, with the projects wants the boost the country’s power supply and increase the local production capacity for cement.
This was disclosed by the Chairman of BUA Cement, Abdul Samad Rabiu, in a press statement on Sunday, July 5, 2020, in Lagos.
The BUA Cement Chairman who led the company’s management team on a courtesy visit to the Adamawa State Governor, Ahmadu Umaru Fintiri, after preliminary findings showed that Guyuk and Lamurde areas had quality limestone.
According to Rabiu, “Preliminary findings show that the two local governments of Guyuk and Lamurde are reputed to have good quality limestone deposits and BUA Cement is ready to begin the investment in the state.
“BUA will use new technologies to supply power to the proposed cement plant and communities of Guyuk and Lamurde in addition to providing three thousand direct and five thousand indirect jobs.
“Guyuk Cement Plant will be a major investment in the North-East by BUA, while we solicit the support of Gov. Umaru Fintiri to set up the factory in Guyuk.”
He added that while the company has invested billions of dollars in various sectors across Nigeria, it has taken a decision to source its raw materials locally and therefore urged the Adamawa state government to support BUA to actualize the GUYUK Cement project.
The Adamawa State Governor, Ahmadu Fintiri, in his response assured the Chairman and management team of BUA, that the state government would provide all the necessary support and make available whatever was needed to make the projects a reality.
BUA Cement’s newest plant in Sokoto is expected to be operational in 2021 and expects that its total production capacity will get to 14 million metric tonnes of cement per annum upon the completion of Guyuk Cement Plant.
BUA Cement has been having a running battle with Dangote Cement over the ownership of 3 mining sites in Obu and Okpella in Edo State. The mining sites have been subject of legal tussle between the 2 biggest cement companies in the country.
GSK, Sanofi to agree $624 million deal with UK for COVID-19 vaccine
Both GSK and Sanofi said that they are placing more priority on quality rather than speed.
British and French pharmaceutical giants, GlaxoSmithKline (GSK) and Sanofi are close to reaching a $624 million (500 million pounds) deal with the United Kingdom (UK) government for the supply of 60 million doses of coronavirus vaccine as many countries move for possible COVID-19 treatments.
Reports suggest that the UK was considering an option to buy the vaccine should the human trials, which are due to commence in September 2020, turn out successful.
The funds would be paid in stages as the vaccine progresses, with the final payment made on delivery.
In order not to be left behind, the UK government has been engaging a wide range of companies both at home and abroad to negotiate access to vaccines. They said that the right announcements of these arrangements will be made as and when agreements with any of these companies are finalized.
The British business ministry’s spokeswoman, who confirmed that the ministry is handling Britain’s supply of potential COVID-19 vaccines, said talks were going on with different parties about access to possible vaccines but didn’t confirm if GSK/Sanofi project was one of them.
According to the ministry official, ‘’The Government’s Vaccines Task Force is actively engaging with a wide range of companies both in the UK and abroad to negotiate access to vaccines.”
“Appropriate announcements of these arrangements will be made as and when agreements with any of these companies are finalized and signed.”
Sanofi is presently working on 2 possible COVID-19 vaccines, one of which uses an adjuvant made by GSK to potentially boost its efficacy. The timeline for its clinical trials is behind the likes of Moderna Inc, the University of Oxford in collaboration with AstraZeneca Plc and an alliance of BioNTech and Pfizer Inc, whose projects all made headlines by moving to human trials as early as March.
Both GSK and Sanofi said that they are placing more priority on quality rather than speed in developing a vaccine.