The Bureau of Public Enterprises will be putting up for sale the remaining 10 Nigerian National Integrated Power Projects.
The BPE said the planned sale is part of efforts by the Federal Government to boost power supply for Nigeria’s industrial expansion vision.
The Director-General of the BPE, Mr. Alex.O Okoh, who spoke in Abuja on Friday at the signing of a Memorandum of Understanding with an infrastructure credit enhancement firm, InfraCredit, also disclosed that the Nigerian Government-owned Satellite Communications company, NigComSat, would be privatised to make it more competitive.
According to him, a committee to prepare the NIPPs privatisation transaction has been put in place with the target of the completion of the task billed for this year, while handover of the NIPPs to the successful investors is projected for the first quarter of next year.
The MoU seeks to provide guarantee for a longer tenor credit of up to 15 years for prospective investors in the NIPPs.
The aim is to de-risk the power sector investment and attract competent investors to avoid the pitfalls of the power sector privatisation bedevilled by epileptic service delivery arising from short tenor financing.
According to Okoh, InfraCredit has committed to guarantee as much as N300 billion of financing for the power divestment transaction to investors and believes the development will boost the much needed sound corporate governance culture that would ensure investible resources and create sustainable value for the economy.
“In this regard, InfraCredit intends to partner with the Bureau to de-risk the financial environment, especially with regards to power sector investments. They have a target of achieving N300 billion worth of investments deals within three years,” Okoh revealed.
The Managing Director of InfraCredit, Mr. Chinua Azubike, expressed his firm’s delight to be associated with de-risking Nigeria’s financial sector, aimed at assisting it to perform its mandate in Nigeria.
Azubike said his firm, a triple ‘A’ rated guaranteed company, is owned by the Nigerian Sovereign Investment Agency (NSIA) and equally backed by GuarantCo, a private infrastructure development Group; KfW Development Bank and the African Finance Corporation.
According to him, InfraCredit has already played a major role in guaranteeing credit for investment with the pension funds in Nigeria among other interventions.
The NIPPs project was conceived in 2004 under the administration of former president Olusegun Obasanjo. It was formed to address the issues of insufficient electric power generation and excessive gas flaring from oil exploration in the Niger Delta region. Seven power plants were designed in gas-producing states as part of the project.
Planned power plants included Ihovbor Power Station Benin, Edo State with the capacity of 4 x 112.5 MW (ISO 126 MW); Calabar Power Station, Cross River State with the capacity of 5 x 112.5112.5 MW (ISO 126 MW); Egbema Power Station, Imo State with the capacity of 3 x 112.5 MW (ISO 126 MW); Gbarain Power Station, Yenagoa, Bayelsa State with the capacity of 2 x 112.5 MW (ISO 126 MW); Sapele Power Station, Delta State with the capacity of 4 x 112.5 MW (ISO 126 MW); Omoku Power Station, Rivers State with the capacity of 2 x 112.5 MW (ISO 126 MW); and Ikot Abasi Power Station, Akwa Ibom, with the capacity of 2 x 112.5 MW (ISO 126 MW) (replaced later by Ibom Power Station).
Together, the projects generated contracts worth $414,000,000 for the supply of turbines and electricity generation equipment to General Electric (GE). The primary turbine is GE 9E gas turbine with a nominal ISO rating of 126MW. After adjusting for site conditions, the capacity was set to 112.5 MW. The plants are low efficiency simple cycle but have provision for future extension to combined cycle
administration changes in 2007 interrupted funding for more than two years.
The NIPP projects includes 11 power plants and 4 FGN Power Stations: Alaoji Power Station, Abia State, combined cycle plant with the capacity of 4 x 112.5 MW (ISO 125 MW) and 2x steam 255 MW;
Omotosho II Power Station, Ondo State, with the capacity of 4 x 112.5 (ISO 125 MW); Olorunsogo II Power Station, Ogun State, combined cycle plant with the capacity of 4 x 125 MW and 2 x steam 125 MW; and Geregu II Power Station, Kogi State, with the capacity of 434 MW.
Following the Afam V and Geregu I plants, Geregu II is now the third gas-turbine power plant to be constructed by Siemens in Nigeria as a turnkey project and completed on schedule. The scope of delivery supplied by Siemens for Geregu II included three SGT5-2000E gas turbines, three SGen5-100A generators, as well as all the electrical systems and the SPPA-T3000 control system.
The Ikot Abasi NIPP power plant has been replaced by Ibom Power, which is a 190 MW project of the Akwa Ibom State Government. The revised project involves large-scale transmission projects across all of Nigeria, which are crucial to ensure power distribution from generation plants to final customers.