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22-24 October 2014
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Faces Behind Nigeria privatised Electricity Industry

Posted by admin | 03.25.14

Following the physical handover of power facilities after unbundling the public power utility, the Power Holding Company of Nigeria (PHCN), major players in the Nigerian economy have emerged core owners of the Generation and Distribution Companies (GenCos and DisCos).

Nigeria’s power transmission business renamed Transmission Company of Nigeria is now managed by Manitoba Hydro International while the power generation and distribution companies were privatised by the federal government. LEADERSHIP analysis has indicated that the power sector has become one business area that has attracted Northern businessmen as shown by their high number among the faces behind the privatised electricity industry controlled by some of Nigeria’s richest men.

Power Transmission

Transmission Company of Nigeria- Manitoba Hydro

Mr Ibrahim Waziri is the Board Chairman of the Transmission Company of Nigeria (TCN) which was inaugurated in January by the federal government. Manitoba Hydro International (a Canadian based company) was awarded the contract to manage TCN – one of the successor PHCN companies after an exhaustive bidding process conducted by the Bureau of Public Enterprises (BPE).

Manitoba is expected to transform TCN into a technically and financially efficient company during their three year contract during which they are mandated to develop the proficiency of TCN staff through training and capacity building programmes. Under the management of Manitoba, TCN is expected to effectively and reliably wheel power generated by generation companies, to load centres.

Waziri who holds a Bachelor of Science degree in Accounting from the Ahmadu Bello University (ABU) Zaria and an MBA from the University of Lagos is expected to bring his managerial expertise to bear on the board of TCN.

Currently a non-executive director of First Bank, Waziri was a Managing Partner of Gulf of Guinea Petroleum Consulting Limited, a Nigeria-based consulting firm which offers professional expertise to diverse clients and interests in Nigeria.

He also served as member of the federal government technical committee on expenditure review that advised the government on enhancing value of overhead expenditure and reducing waste in government spending. Between 2003 and 2009, Waziri was also the Group Executive Director, Corporate Services at the Nigerian National Petroleum Corporation (NNPC). He has also served as Director Bonny Gas Transport Limited, Deputy Managing Director Nigeria LNG Limited, Executive Director at the Nigeria Gas Company Limited and the Pipeline and Product Marketing Company (PPMC).

Kainji, Jebba Power Plants- Col. Sanni Bello

Col. Sani Bello is the chairman of Mainstream Energy Solutions Limited (MESL) whose company bought into the Kainji Hydro Electric Plant and Jebba Hydro Station assets after paying $170 million. The Kainji and Jebba power stations both owned by Kainji Hydro Electric Plc was part funded by a medium term syndicated acquisition facility. The syndication was funded by Guaranty Trust Bank (GTB) and Africa Finance Corporation (AFC).

Col. Sani Bello (rtd) was a former military administrator of Kano state has been involved with various companies as chairman or director, including Former Broadbank Nigeria Ltd, Globe Re Nigeria Ltd, Law Union and Rock Insurance Company Plc, Amni International Petroleum Development Company Ltd, Dantata and Sawoe Construction Company Ltd, MTN Communications Ltd, Equatel Communication Ltd, President of National Association of Indigenous Petroleum Explorers in Nigeria. Mainstream energy is the highest electricity generating company in Nigeria. He is also a farmer and Proprietor of Mustafa Comprehensive School, Kontagora.

The consortium of companies which have equity interests in MESL include; Allstream Energy Solutions, Amni International Petroleum Development Company, Anchorage Holdings Limited, Bullet International, Conexel Nigeria Limited, Confluence Cable Network (“CCN”) and Crust Energy.

MESL also has a technical partner in the form of Russian company, RusHydro Group which has significant hydro power experience across Russia and several bi-lateral relationships in Asia and Europe. MESL has restated that its focus is to sustain the current capacity and meet the five-year target of 1500 MW as contained in the terms of concession for Jebba and Kainji hydro companies. It recently added another unit to the Jebba hydro station, increasing the plant’s capacity from 380 MW to 450 MW.

Abuja Electricity Distribution Company- Alhaji Shehu Malami

KANN Utility Consortium Company Limited has the full control of Abuja Electricity Distribution Company which it bought at the cost of $164 million. The consortium is chaired by Alhaji Shehu Malami. Standard Bank of South Africa (SBSA) acted as the financial advisors to Copperbelt Energy Corporation (CEC) Plc with respect to its acquisition of 60 percent shareholding in Abuja Electricity Distribution Company vide Kann Utility Consortium Company Limited.Shehu Malami, is a Nigerian diplomat and businessman who was Nigeria’s High Commissioner to South Africa during the administration of General Sani Abacha is the chairman of KANN Utility Consortium Company Limited. He was former chairman of Costain West Africa and PZ. KANN Utility Consortium is a joint venture between CEC and Xerxes Global Investments Limited. CEC is a Zambian based company engaged in generation, transmission and distribution of electricity predominantly to the mining sectors in Zambia, Congo Democratic Republic and South Africa.

Kano Distribution Company- Alhaji Umaru Mutallab

Sahelian Power SPV Limited which acquired the Kano Electricity Distribution Company at the cost of $102 million has Alhaji Yusuf Hamisu Abubakar as the chief executive officer (CEO) while Alhaji Umaru Mutallab is the chairman. Mutallab is a respected businessman and a former chairman of Nigeria’s oldest and largest bank, First Bank Plc.

Sahelian Energy Power SPV Limited, which acquired the Kano Disco is a consortium comprising Incar Power Limited (IPL) which is promoted by Alhaji Umaru Muttalab, Dantata Investment and Securities Limited which is promoted by Alhaji Aminu Dantata, Sahelian Energy and Integrated Services Limited (SEIS), promoted by Alhaji Yusuf H. Abubakar, Highland Electricty Limited (HEL), promoted by Alhaji Kashim Bukar Shettima and Kayseri Ve Civari Elektrik T.A.S. (KCETAS), a Turkish electricity generation and distribution company.

Alhaji Umaru Mutallab is largely credited for playing a major role in introducing Islamic Banking into Nigeria. Alhaji Yusuf Hamisu Abubakar, the managing director of Sahelian Power, is a commissioner at the Nigerian Communications Commission (NCC), a one-time executive secretary of the Petroleum Development Trust Fund (PTDF) and former lecturer at the University of Nigeria, Nsukka and the Ahmadu Bello University, Zaria

Ibadan, Yola Electricity Distribution Companies- Gen Abdulsalami Abubakar

Integrated Energy Distributing and Marketing Limited owned by Gen. Abdulsalami Abubakar former Nigeria’s head of state owns the Ibadan Electricity Distribution Company and Yola Electricity Distribution Company bought at the total cost of $171 million. The company paid $126.75 million for Ibadan and $44.25 million for Yola Disco. The Integrated Energy was one of the earliest firms to complete payment for its respective bids and was the only investor that acquired two distribution companies. The company is promoted by a former military head of state, Gen. Abdulsalami Abubakar.

The retired general was Nigeria’s head of state for almost a year after the death of his predecessor, Gen. Sani Abacha in 1998. He is currently regarded as an elder statesman with several international appointments and honorary degrees. The vice chairman of the company, Mr. Tunde Ayeni, is a seasoned lawyer and astute business man and currently sits on the board of Skye Bank and Aso Savings and Loans Plc.

Integrated Energy has entered into a technical partnership with the Manila Electric Company (MERALCO), the Philippines largest distributor of electric power, to manage its technical facilities. The vice chairman Mr. Tunde Ayeni has said that the company is planning to invest in massive human capital development and advanced technological input to ensure stable power in the country and also intends to promote the culture of energy saving.

Jos Electricity Distribution Company- Alhaji Garba Mohammed Noma

The Aura Energy Limited owned by Alhaji Garba Mohammed Noma paid $82 million to buy into the Jos Electricity Distribution Company. Alhaji Garba Mohammed Noma, is the key promoter of Aura Energy. He is a seasoned administrator with more than 36 years’ experience at senior executive levels in the Nigerian public and private sectors. He is also a politician and a former speaker of the House of Assembly in Bauchi State in the First Republic.

The Aura Energy Limited consortium is made up of Aura Energy Limited and its technical partner; Aydem Elektrik Dagitim A.S. of Turkey. Aydem has over twentyyears experience in the Turkish power sector and currently distributes reliable energy supplies to over 1.5 million customers in its distribution region. It is to provide Aura Energy with its specialist knowledge and expertise to improve the performance of the Jos Electricity Distribution Company.

Transcorp Ughelli Power Plant- Tony Elumelu

The Ughelli Power Plant with an installed capacity of 972 MW was acquired by the Transcorp/Woodrock Consortium through a debt financing facility arranged by African Finance Corporation (AFC), United Bank for Africa Plc (UBA), First City Monument Bank (FCMB) and Fidelity Bank at the cost of $300million.

Mr. Tony Elumelu, a former CEO of UBA played a major role in the deal through his company Heirs Holdings Ltd. Mr. Elumelu had a stellar track record as a banker during his time as CEO at UBA and since his retirement in 2010, his brain child; Heirs Holdings has been promoting businesses, especially small and medium scale enterprises across Africa.

Transcorp Ughelli Power Limited (TUPL), which also has Wood Rock Energy Resources Limited, Symbion Power LLC, Thomassen Holding Limited, Medea Development SA, Tenoil Petroleum and Energy Services Limited and PSL Engineering and Control Limited as equity investors/partners, plans to immediately carry out a three-phase operation of “Quick wins, refurbishment and expansion.” These involve activities that will immediately address the shortage in available capacity and increase the power generation capacity of the plant from 300 MW to over 1500 MW in the next five years.

TUPL, the power subsidiary of Transnational Corporation of Nigeria Plc (Transcorp), and General Electric (GE) in recently signed an agreement to expand the capacity of TUPL’s Ughelli power plant by1000MW over the next 3 to 5 years. Both parties also signed a separate agreement to rehabilitate the damaged GT 15 turbine at the Ughelli plant, which will add 115MW to the plant’s output.

Elumelu speaking on the Ughelli plant expansion project said “We’ve taken a bold step in fulfilling our promise to Transcorp’s stakeholders and the people of Nigeria. In a very short period of time, we have achieved significant impact – power production has more than doubled, and with this agreement, we will see increased output before the end of this year. We are confident that this partnership with GE will further accelerate the achievement of our goals in the power sector.”

Currently, the Transcorp Ughelli power plant generates 360MW of electricity, up from 160MW on November 1, when Transcorp took ownership of the plant. With the additional 115MW, as well as other rehabilitation works planned at the plant, output at Ughelli will increase to 700MW by December 2014.

The Ughelli power plant is Nigeria’s largest gas-fired electricity generation asset. Purchased by Transcorp during the 2013 power privatization programme, the $300 million plant is part of the $2.5 billion investment pledge made by the Chairman of Transcorp and Heirs Holdings, Tony O. Elumelu, CON, to deliver affordable, accessible power to Africa under the Power Africa Initiative. Heirs Holdings, Elumelu’s pan-African proprietary investment company, is Power Africa’s largest private sector investor and a major investor in Transcorp.

Geregu Power Plants – Femi Otedola

The Amperion Power Distribution Limited whose chairman is Mr. Femi Otedola purchased the Geregu Power Plant at a total cost of $132 million. The acquisition of the Geregu power plant, with an installed capacity of 414 MW was spear headed by Mr. Femi Otedola, who is also the chairman of Amperion’s parent company Forte Oil.

Forte Oil owns 57 percent of Amperion’s equity, while its technical partners BSG Resources Limited, a global diversified energy group owns 38 percent and the Shanghai Municipal Electric Power Company (SMEPC), the world’s largest power company has a five percent stake.

Mr. Otedola, a billionaire owner of multi-billion naira indigenous oil giant Zenon, the dominant force in the diesel business among oil marketing concerns supplies all the important fuel used to power generating sets of most Nigerian industries and manufacturing firms including Dangote Group, Cadbury, Coca Cola, Nigerian Breweries, MTN, Unilever, Nestle, and Guinness, among others.

According to the CEO of Forte Oil, Mr Akin Akinfemiwa, the move into power is part of the company’s transformation programme which includes its diversification into other high margin energy sectors such as power generation and upstream exploration and production. Amperion Power, utilizing the strengths of its technical partners has stated that it intends to ramp up the capacity of the plant by about 50 percent to over 600 MW in the short to medium term.

Shiroro Power Station- Engr. Olubunmi Peters

North South Power Company Limited which committed $111.7 million to acquire the Shiroro Power Station has Eng. Olubunmi Peters as Vice Chairman. The North South Power Company Limited acquired the 600MW capacity Shiroro power station with the help of a successfully arranged debt financing deal by UBA, which acted as the financial adviser and mandated lead arranger of the transaction.

Former military head of state, General Ibrahim Babangida has been strongly linked to North South Power as its primary promoter; however representatives of the company have vehemently denied this. The “official” members of the consortium behind North South Power include; XS Energy Limited, BP Investment Limited, Urban Shelter Limited, Transatlantic Development and Investment Company, Roads Nigeria Plc (Nigeria) and Niger State Government.

The consortium is also backed by their technical partners, China International Water Electric and China Three Gorges Corporation. The company’s vice chairman Engineer Olubunmi Peters has indicated that North South Power intends to add 600 MW into the national grid and then add 200 MW in its third year.

Egbin Power Station- Mr. Tonye Cole

KEPCO Energy Resources Limited chaired by Mr. Tonye Cole completed the purchase of Egbin Power Station at the cost of $407.3 million. KEPCO Energy Resources, a joint venture between Korea Electric Power Corporation (KEPCO), a South Korean power company with assets across the globe and Nigeria’s Sahara Energy Group; had in 2007 acquired a 51 percent equity stake in the 1,320 MW capacity plant at a cost of $280 million, as part of the ongoing privatisation process of the country’s ailing power sector by the Federal Government.

However, due to several challenges, the handover of the plant to KEPCO was delayed for over six years. KEPCO was then offered additional 19 percent shares in 2013 through a supplemental share purchase agreement, thus bringing the total acquisition by the company to 70 percent. Under the new terms, the Council asked KEPCO to pay 51 percent of the plant’s shares at the 2007 valuation of $549.01million, and pay for an additional 19 percent of the shares at the current valuation of $670 million.

Ikeja Electricity Distribution Company- Mr. Kola Adesina

New Electricity Distribution Company and Korea Electric Power Corporation, NEDC/KEPCO Consortium emerged new owners of the Ikeja Electricity Distribution Company (IEDC) following the transfer of PHCN asset to private investors on November 1, 2013 by the Federal Government. The company has KEPCO) as technical partners. NEDC/KEPCO Consortium paid $131 million for 60 per cent of IEDC.

NEDC/KEPCO chaired by Mr. Kola Adesina are partnering Sahara Energy as local partners, acquired the Ikeja Distribution Company. Kola Adesina is also the Executive Director of Sahara Energy. KEPCO, the largest electricity utility company in Asia in terms of transmission & distribution, has six generation subsidiaries with 84,000MW capacity, several subsidiary companies and a global efficiency record of a maximum downtime period of four minutes annually.

Sahara owns majority shareholding in Egbin Power station – the largest Power Generation Plant in Nigeria – and Ikeja Electricity Distribution Company – the largest power distribution network in Nigeria. Kola Adesina, was vice chairman of PHCN during late President Yar’Adua’s government. Sahara Energy is linked with the gas supply contracts.

Benin Electricity Distribution Company- Victor Osibodu

Mr. Victor Gbolade Osibodu, chairman of Vigeo Power Limited prides himself as the new owner of the Benin Electricity Distribution Company which the company bought at the cost of $129 million. Vigeo Power Limited acquired the Benin Electricity Distribution Company through the assistance of Stanbic IBTC, which helped in raising equity and providing debt financing to part fund the acquisition.

Osibodu, the main promoter behind the Vigeo Consortium, is the chairman of Vigeo Holdings and is also the husband of former managing director of Union Bank, Mrs. Funke Osibodu. Mrs. Osibodu is now the current managing director/CEO of Vigeo Power Limited.

Mr. Osibodu, a recipient of the Member of the Federal Republic of Nigeria (MFR) is a graduate of Pharmacy at the then University of Ife (now Obafemi Awolowo University) and an alumnus of the Lagos Business School and the Harvard Business School. His career spanned through the Nigerian Navy, the Boots Company Limited and Bodnat International. He serves as the Chairman of Special Olympics, Nigeria.

Vigeo Holdings has been running a company called Global Utilities Management Company (GUMCO) founded in 1999 as a utility infrastructure management company providing services to improve the efficiency in the downstream sector of the electric power industry. GUMCO has, in the past few years, been involved in the National Prepayment Metering Programme in partnership with the Benin Electricity Distribution Company.

The consortium comprises Vigeo Holdings Limited, as the consortium lead and equity member, Global Utilities Management Company Limited (GUMCO) as local technical partner and equity member, African Finance Corporation (AFC) as equity member and Tata Power Delhi Distribution Limited (TPDDL) as well as the Calcutta Electric Supply Corporation Limited (CESC) as the foreign technical partners. According to Osibodu, the consortium plans to invest an additional N40billion into the Benin Disco for infrastructure over the next five years.

Port Harcourt Distribution Company- Mr. Augustine Nwokocha

For the Port Harcourt Distribution Company, Mr. Austin Nwokocha’s 4Power Consortium Limited paid $124 million to pick the asset. The Governments of Bayelsa, Cross River, Akwa Ibom and Rivers State are firmly behind the 4Power Consortium which acquired the Port Harcourt Electricity Distribution Company, with Rivers State in particular authorizing Guarantee Trust Bank Plc (GTB) to issue bonds and guarantees on behalf of 4Power Consortium Limited to enable the acquisition of the asset.

4Power Consortium Limited has nine equity companies in the consortium including; Taleveras Group of Companies Limited; Lilleker Brothers (Nigeria); Income Electrix Limited/CESC Limited Joint Venture; Skyview Power Technologies Limited; First Independent Power Company Limited; Akwa Ibom Investment and Industrial Promotion Council (AKIIPOC); Paradise Power Nigeria Limited; Bayelsa Electricity Company Limited; and CESC.

The chairman of 4Power Consortium, Mr. Augustine Nwokocha, is also the commissioner of energy for Rivers State. He has stated that the new company’s core functions will continue to be distribution and marketing of electricity in Rivers,Akwa Ibom,Bayelsa and Cross River States in Nigeria’s South-South region.

Enugu Electricity Distribution Company- Sir Emeka Offor

Sir Emeka Offor’s Interstate Electrics Limited controls the Enugu Electricity Distribution Company which total value was $107.4 million. The Enugu DisCo was acquired by Interstate Electrics amidst some controversy. It did not meet up with the 75 percent payment deadline. and many questioned why it should be given the nod ahead of other capable bidders like Eastern Electric sponsored by a consortium of investors which included Geometric Power Limited led by Professor Barth Nnaji, the five South Eastern State governments, Nestoil, Aba Power Limited and Mr. Pascal Dozie, the founding chairman of Diamond Bank.

It however emerged that Interstate took advantage of the available window for the completion of outstanding balance as spelled out in the Share Purchase Agreement (SPA).This apparently gave Interstate Electrics a 20 working day extension after the expiration of the original deadline on August 21 to make payment. Sir Emeka Offor, is the chairman of Interstate Electrics while also chairman of Chrome Consortium Energy Nigeria Limited, a company with interests in oil and gas services, telecommunications and logistics. Interstate Electrics Limited consortium comprises Chrome Consortium Energy Nigeria Limited, Powerhouse International Limited, and Metropolitan Electricity Authority (MEA) as the consortium’s technical partner. Metropolitan Electricity Authority of Thailand possesses over 50 years experience and currently distributes over 12,000MW of electricity in Thailand.

Eko Electricity Distribution Company- Mr. Charles Momoh

Eko Electricity Distribution Company is managed by West Power and Gas Limited whose chairman is Mr. Charles Momoh. The company paid $135 million to take over the facility. Mr. Charles Momoh, Dr. Tunji Olowolafe and Mr. Ernest Orji are the key promoters of West Power and Gas Limited (WPG). Mr. Momoh, aside from being chairman of WPG is also the managing director of Atlantic Meridean Limited, an indigenous oil servicing company.

Dr. Olowolafe, a medical doctor by profession, is the chairman and managing director of Deux Project Limited, a civil engineering, construction and consultancy company. He also sits on the board of several other companies. Mr. Orji, a former non-executive director of Finbank Plc, prior to his removal along with three others by the Central Bank of Nigeria, is the chairman of Alpha Consortium Limited, a company with considerable experience in the power sector.

He is also the lead investor of a consortium that owns the Southern Sun Ikoyi Hotel. The WPG consortium comprises Alpha Consortium Limited, Atlantic Meridean Limited, Africa Infrastructure Investment Fund 2 Mauritius, and Siemens Limited of Germany, the executor of the recently commissioned 434MW Geregu II National Integrated Power Project (NIPP) under the Niger Delta Power Holding Company (NDPHC). WPG has allocated $250 million towards rehabilitation work while it has allocated a further US$48 million towards a power purchase agreement with the Nigerian Bulk Electricity Trading Plc (NBET).

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