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Nigerian Government meets key objectives in attracting private investment in power sector

International investors have responded with enthusiasm to the Nigerian Government’s attempts to attract private investment into its power industry with over 100 bidders submitting expressions of interest to acquire majority shareholdings in the NIPP ten new thermal power plants.

The combined sales could generate several billions of US dollars and would represent one of its most successful private investment projects.
According to the Niger Delta Power Holdings Company (NDPHC), 110 bids had been received by the 19 July cut-off date.
The sale process is being handled by the NDPHC, a special purpose company set up by the government in 2005 to implement its National Integrated Power Project (NIPP), and the Bureau of Public Enterprises. The NIPP represents the Nigerian Government’s flagship project that is mandated to add new generation, transmission and distribution capacity to Nigeria’s electricity supply industry and resolve its chronic shortfall in supply.
Anthony Muoneke, executive director, (finance and administration) at the NDPHC and chairman of the joint working group, superintending the share sale transaction, says: “This is a tremendous vote of confidence by the international investment community for the Federal Government of Nigeria’s declared policy to increase private sector involvement in the electricity industry.
“The historic inability of the power industry to meet demand has held Nigeria back as a country and prevented the Nigerian people from achieving their true potential. This will go a long way to addressing the current shortfall between supply and demand that plagues Nigeria.
“This government, under the leadership of President Goodluck Jonathan, is committed to resolving this situation and the Minister of Powers Professor Chinedu Nebo has set a tight schedule of performance increases which are now being met.”
Each of the ten power plants is currently owned by a wholly owned subsidiary of NDPHC and 80 per cent of the outstanding shares of these subsidiaries is offered for sale. Five of the plants are either fully or partially operating today with the remainder due to be operational latest mid-2014. Once operational, the ten power plants will generate over 5,000MW (ISO).
Each generation company will benefit from a contract structure covering the sale of electricity, the supply and transportation of natural gas, and access to the electricity transmission network.
The sale process has included staging events in New York, Lagos, Hong Kong and London during June. Each roadshow attracted over 400 attendees including representatives from the international investment community and their advisors. 
At the 2013 Ministerial Platform held in Abuja on 23 July the Ministry confirmed that its year on year performance “score card” included increasing available generation capacity from 3,700MW in 2010 to 6,522MW in 2012-2013, and the average number of hours of power availability per day has also increased from eight hours in 2010 to 16 hours in 2012.
The NDPHC will now evaluate all the bids received and create a shortlist by 8 August. Those shortlisted will receive a request for proposal and will have until November to submit their proposal.

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