Federal Government Plans to Sell Five Power Plants for $1.15 Billion

Federal Government Plans to Sell Five Power Plants for $1.15 Billion

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The Federal Government, through the Bureau of Public Enterprises (BPE), is currently engaged in negotiations for the sale of five power plants as part of the National Integrated Power Projects (NIPP), with a targeted revenue of about $1.15 billion. Sources familiar with the situation revealed that while the international benchmark suggests a value exceeding $5 billion, the BPE is contemplating selling the facilities at a slightly higher amount, around $1.1 billion.

The Acting Director-General of BPE, Ignatius Ayewoh, confirmed the ongoing transaction but emphasized that it has not been concluded. The specific cost for the five power plants was not disclosed during Ayewoh’s brief telephone conversation with the correspondent due to an ongoing meeting.

However, reliable sources from the BPE identified the five power plants earmarked for sale as the 434 megawatts gas-fired Geregu II power plant in Kogi, the 451MW Omotosho II plant in Ondo, the 750MW Olorunshogo II plant in Ogun State, the 563MW Odukpami power plant in Calabar, Cross River State, and the 451MW Benin-Ihovbor plant in Edo State.

According to the sources, the Omotosho plant, equipped with four power generating turbines, is expected to be sold for approximately $85 million, while the Olorunsogo NIPP, also featuring four turbines, is estimated at $170 million. The Benin-Ihovbor plant, boasting five power generating turbines, is targeted at $420 million, the Calabar Odukpami plant with five turbines at about $260 million, and the Geregu plant with four turbines at $215 million.

“These are Siemens turbines, and each of the turbines can generate about 115MW of electricity,” said one of the sources, who preferred anonymity.

The estimated cost of constructing a 1MW power plant is around $1 million, as provided by the sources. They highlighted that if the five NIPP plants were valued based on this metric, their collective worth would surpass $5 billion.

The sale of the NIPPs has been a subject of discussion and planning by the BPE for several years, with various details and target amounts evolving over time. The National Council on Privatisation approved the fast-track strategy for the sale of five NIPPs in April 2021, with the Nigerian National Petroleum Corporation expressing interest in their acquisition in March 2022.

While the former BPE boss projected the sale to generate over N260 billion (approximately $600 million), it has not been finalized as of now. The Niger Delta Power Holding Company, which manages the NIPPs, has not officially confirmed their sale. Speculations regarding the initial estimates for individual NIPPs range from $300 million to $500 million.

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