Home Business News FG shops for new buyers for Afam power plant and Yola Disco

FG shops for new buyers for Afam power plant and Yola Disco

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Plans are underway by the Federal Government to find new buyers for two power firms: the Yola Electricity Distribution Company and Afam Power Plants 1-5-which are expected to inject additional power into the national grid- to any willing investors.

The Yola Electricity Distribution Plc, or Yola Disco, is located in the North Eastern region of Nigeria under the activities of Boko-Haram insurgent group. Its area of operation include states such as Adamawa, Borno, Taraba, Yobe and towns near Yaounde, Cameroon, and the Chad and Niger borders.

Following persistent attacks on its facilities in the North-East, the investor-Integrated Energy and Distribution Marketing Company has pleaded with the Federal Government to buy back its 51% stake in the firm.

The investor had on several occasions issued a force majeure to the Federal Government. The Force majeure is a standard in contracts which is invoked in the occurrence  of events such as natural disasters, wars, and other occurrences outside the power or control of the investing company that hampers the implementation of such contracts.

The power sub committee of the National Council on Privatization NCP – the apex body charged with the overall responsibility of formulating and approving policies on privatisation and commercialisation of national assets- has however acknowledged the basis for the declaration of a force majeure hence the pull out of the former investor. The council has also appointed an acting Managing Director for the distribution company.

The Afam Power Plc is a thermal power plant located in the gas rich Rivers State. The plant has an installed capacity of 977MW. It is an open cycle gas turbine. The plant was built between 1975 and 2001. Afam I-IV has an operating capacity of 836.6MW, while Afam V possesses the capacity to generate 276MW of electric power.

In 2005, Shell Petroleum Development Company (SPDC) made attempts to buy Afam I-IV and V but the negotiations fell through. Instead, SPDC initiated the construction of Afam VI. Outright sale option was adopted by the Bureau for Public Enterprises in the sale of Afam I-V which was culminated on the 1st of November 2013.

The Taleveras consortium comprising  Alstom Nigeria Limited,  Alstom Group, and Taleveras Petroleum Trading BV, a British West Indies company involved in physical trading of crude oil and refined petroleum products, emerged winner of the bidding process having put in a $260 million bid.

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