Asia Pacific

Korean firm gets 70% of Egbin power plant

Chairman, Technical Committee, National Council on Privatisation, Mr. Atedo PetersideThe National Council on Privatisation on Thursday approved the sale of 70 per cent of the Federal Government’s stake in the Egbin Power Plc, Lagos.

The Chairman of the council’s Technical Sub-committee, Mr. Atedo Peterside, disclosed this to State House correspondents at the end of its meeting presided over by Vice President Namadi Sambo.

Peterside said the plant would be sold to KEPCO for $407.3m.

He recalled that the transaction was conceived in 2007 when the Federal Government initially agreed to sell 51 per cent of the plant.

Peterside said, “What we have done today (Thursday), after negotiations and approval by the NCP, is to agree to sell 70 per cent 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 per cent 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 the valuation and increased the transaction cost, and they are paying a larger sum of money. The evaluation that we have done with Egbin at a value of $670m is higher than the original evaluation of $549m.

“In total, they are going to pay $407m to the Federal Government and the evaluation was comparable to the evaluation that was done for Geregu, Sapele and Ugheli Power plants.”

Peterside said the government also resolved to sell the Omotosho and Olorunsogo Power plants to the Chinese companies that built them.

He recalled that the plants were already under construction at the time the government decided to privatise the power sector; therefore, a decision was taken that the construction firms should be given rights of first refusal to buy the plants.

Under this arrangement, he added that the firms would pay the balance of the money the government had already paid them for the construction.

With this transaction, Peterside said every power plant now had a core investor except for Afam.

The Minister of Communications Technology, Mrs. Omobolanle Johnson, said the NCP approved a reform bill for the Nigeria Postal Service to make it perform better in postal regulation and operating activities, and contribute more to the nation’s Gross Domestic Product.

She said the bill would be sent to the Federal Executive Council for deliberation and transmission to the National Assembly.

The Minister of Mine and Steel Development, Mr. Musa Sada, said the NCP deliberated on the report on the progress being made by the Attorney-General of the Federation, Mr. Muhammed Adoke, on the issue of arbitration that was delaying the privatisation of the Ajaokuta Steel Plant and Aluminium Smelter Company of Nigeria.

Sada said progress was being made in the efforts aimed at reaching an out-of-court settlement.

He said, “We are beginning to see that very soon, we are likely to conclude some of those issues, such that the BPE will take full charge of these two important facilities and ensure they 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 Director-General, Bureau of Public Enterprises, Mr. Benjamin Dikki, said the council also considered and recommended five bills in the transport sector for the ratification of the Federal Executive Council and onward transmission to the National Assembly.

Also on Thursday, Amperium Consortium, presented a confirmation of payment of $33m, including local component of N519.12m into the bank account of the BPE.

The payment was the 25 per cent down payment required for the consortium to acquire 51 per cent of the Geregu Power Plant.

The bid winners for the power plants were earlier given 15 days within which to make the down payment.

Amperium Consortium was the first to make the payment.

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