February 21 2018
The fluctuating foreign exchange rate, gas, transmission and distribution constraints are key challenges delaying privatisation of the 10 Generation Companies (GenCos) built by the Niger Delta Power Holding Company (NDPHC), its former Managing Director, James Olotu has said.
Olotu who disclosed this in an interview said the National Integrated Power Projects (NIPP) plants' sale was bided for $5.7 billion (about N2.057 trillion) for 80 percent shares in 2014 but the transaction was yet to be completed nearly four years after.
NDPHC has 10 GenCos with 5,778 megawatts (MW) electricity capacity, 130 transmission substations, 350 distribution projects and gas assets worth $8.4bn (about N3.032trn) under the National Integrated Power Projects (NIPP) that is financed by the three tiers of government.
He said after the bidding process, the buyers started complaining of inadequate transmission, gas and distribution.
"They said distribution will not take all the power because it is sending the power only to areas where they can get their money back quickly," he explained.
Olotu said after government tried to solve the problem, the bidders could not raise the money due to high foreign exchange rate.
"We solved the technical problems and asked them to come and buy, even those who bided at that time don't have enough money. At the time they were buying the plants for $5.7bn they were buying at $170 exchange rate, today it is about N307 to a dollar," he noted.
He said proceeds from the asset sales was approved for the second phase of the NIPP which was to focus on building about 15 hydro-power plants including 3,050MW Mambilla and Gurara to complement the gas-fired GenCos.
"What the new management is doing now is to run the plants as best as they can to make much money to continue to run the company," Olotu said.