Otedola’s firm pays $33m for Geregu power plant, as NCP oks Korean firm to buy 70% of Egbim plant
Femi Otedola’s firm, Amperium consortium, has presented a confirmation of payment of $33 million including local component of N519.12 million into Bureau for Public Enterprise’s (BPE) account, being 25 per cent down payment for acquiring 51 per cent of Geregu power plant.
Akin Akinfetiwa, CEO of Forte Oil, a partner of Amperium consortium, made the public presentation at the end of the meeting to the Acting Director General Benjamin Dikki.
Though the firm was given 15 days grace, it paid the purchase sum immediately after the approval was granted.
This coming on the heels of National Council on Privatisation (NCP) chaired by Vice-President Namadi Sambo’s approval for the sale of 70 per cent of Egbin power plant in Lagos to a Korean firm, KEPCO for the sum of $407.3 million.
At a meeting held Thursday at the Presidential Villa, the NCP also approved a NIPOST reform bill, that will make the postal agency to return to its role of regulating the industry and also as an operator. But the two functions will be separated as a Postal Commission will be created to act as the regulator.
Addressing State House Correspondents after the meeting which lasted for several hours, Chairman of the Technical Committee of NCP, Atedo Peterside, explained that the Agbin power plant which is currently valued at over $670 million, has appreciated more than the $549 million it was valued in 2007 when the federal government began negotiations to sell only 51 per cent equity of the plant to the same firm.
On the Egbin Power Plant, Peteside said, “What we have done today (on Thursday) is after negotiations and approval by the NCP, is to agree to sell 70 percent of the plant to KEPCO which is a South Korean company.
“KEPCO will pay $407.3m. At the time the transaction was done in 2007, Egbin was valued at $549m and they actually paid a deposit of 10 percent of the amount based on that valuation.
“Based on that valuation, we have agreed to more or less ratify that previous transaction. But we have done and increased transaction and they are paying a larger sum of money. The evaluation that we have done with Egbin at a value of $670m which is higher than the original evaluation of $549m.
“In total, they are going to pay $407m to the Federal Government and that evaluation was comparable to the evaluation that was done for Geregu, Sapele and Ugheli Power Plants.”
Equally approved for sale as part of the plans to privatise the nation’s power generation plants, are Omotosho (Ondo state) and Olorunsogo (Ogun state) to the Chinese firms which are almost done with construction.
According to Peterside, it made sense to NCP to offer the plants on right of first refusal to the Chinese firms since they would naturally understand the plants better and have agreed to a sale price the Council considered reasonable enough.
The plants were offered for $166 million, he said, adding that except for Afam plant, “every other power plant owned by PHCN now has a core investor”.
Meanwhile, the NCP deliberated on the report of the progress being made by the Attorney-General of the Federation, on the issue of arbitration delaying the privatisation of the Ajaokuta steel plant and Aluminium Smelter Company of Nigeria (ALSCON).
Minister of Mines and Steel Development, Musa Mohammed Sada, said the feuding parties had their initial meeting trying to settle out of court and some useful discussions to take the resolution further are ongoing.
“We are beginning to see that very soon we are likely to conclude some of those issues, such that BPE will take full charge of these two important facilities and are appropriately privatised, not the way it happened before that is now putting us into these issues.
“This time, it will be in such a way that they will come back to contribute the way that they are expected to as major industrial backbone of the Nigerian economy”.
The Acting BPE boss, also announced the NCP’s approval of five draft bills for onward transmission to the Federal Executive Council for further approval. They Inland Waterway; Ports; Railways; Road sector; National Transport Commission.