Preferred investors with successful bids for Nigeria’s Integrated Power Projects are currently reworking the amount of investments to put in the assets following the sharp rise in the exchange rate of the United States dollar to the naira. It was learnt that the investors, who were declared successful bidders for seven of the NIPPs in United forex limited power 2014, had been trying to raise funds in order to fully take over the plants once the privatisation process for the facilities is completed by the Niger Delta Power Holding Company of Nigeria.
The NDPHC manages the NIPPs and had put up the plants for privatisation. The process has not been completed despite the announcement of preferred bidders for the plants as far back as 2014. The Executive Director, Engineering and Technical Services, NDPHC, Ifeoluwa Oyedele, told our correspondent that investors in the plant had to source for extra funds, noting that when the bidders expressed interest in the facilities, the exchange rate was around N150 to one dollar. This, according to him, is not the case today, as the exchange rate in Nigeria is currently about N360 to one dollar.
Don’t forget that this is a cycle and the investors are also involved in this cycle. They are trying to raise money because the amount of money they are going to spend is denominated in dollar and they submitted bids for the plants at the time when the exchange rate was N119 or N151 to a dollar. So, they are also trying to rework their investments to ensure that things are a bit stable so that they will not be at the losing end. So, it is the entire value chain that is involved in the negotiations and it takes time.
In March 2014, the Federal Government confirmed the preferred bidders for seven of the 10 power plants owned by the NDPHC and executed under the National Integrated Power Project. 3bn from the sale of the seven power generating plants. It was also announced at the time that the board of the NCP had approved the sale of the affected plants to the preferred bidders following a successful financial bid opening conducted on March 7, 2014. This is a novel issue in Nigeria. Therefore, it is work in progress. Obviously, we have to tread carefully to ensure that we don’t make mistakes.
But I understand that even recently there was a meeting organised by the Bureau of Public Enterprises to work out all of these details. I don’t want to reveal so much in this interview, but I can assure you that there are no serious constraints. It is a new thing in Nigeria, for it is the first time that the government is building power plants with the intention of privatising them. Power Holding Company of Nigeria, were privatised. And the government is still trying to understand that sector and the result of that privatisation. So, it is only fair that we see what effect and how that process was carried out in order to learn from the experiences of that exercise so that we don’t make mistakes when we are doing this one.
So, it is a simple case of treading carefully to get the best for the nation. This material, and other digital content on this website, may not be reproduced, published, broadcast, rewritten or redistributed in whole or in part without prior express written permission from PUNCH. SMS with reference to my application. Get Our Services SEND or RECEIVE money worldwide instantly through Manappuram Finance Limited.
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