FG appoints transaction advisers for Afam Power, Yola Disco – Punch Newspapers

Everest Amaefule, Abuja

The National Council on Privatisation has approved the appointment of transaction advisers for the privatisation of Afam Power Plc and the Yola Electricity Distribution Company, investigation has shown.

The two companies, carved out of the defunct Power Holding Company of Nigeria, are part of the public enterprises scheduled for sale within the year.

The Director-General, Bureau of Public Enterprises, Mr. Alex Okoh, had recently stated that the government expected N400bn from the sale of public enterprises, which would be ploughed into funding the 2018 budget.

Our correspondent learnt that towards the sale of the power firms, transaction advisers had been approved by the NCP chaired by Vice President Yemi Osinbajo, following the recommendation of the BPE.

Authoritative sources confirmed the appointment of the advisers although the identity of the firms could not be ascertained as of the time of going to press. The Head, Public Communications, BPE, Mrs. Amina Othman, did not pick the calls made to her mobile telephone.

With a bid of $260.05m, Taleveras had on July 31, 2013 beaten TES Power to emerge the preferred bidder for Afam Power Plc during the first attempt to sell the firm.

The Taleveras consortium was made up of Alstom Nigeria Limited, an indigenous company involved in the supply, operation and maintenance of power turbines; the Alstom Group, a French company involved in power generation and transport, and Taleveras Petroleum Trading BV, a British West Indies company engaged in physical trading of crude oil and refined petroleum products. The Rivers State Government also had a stake in the consortium.

Taleveras had on December 23, 2013 signed the Power Purchase Agreement with the BPE for Afam, but the transaction could not be concluded because of the inability of the government to sign a gas supply agreement with the company.

For the Yola Disco, this will be the second time the government will sell the electricity distribution firm.

Following difficulties in running the Yola Disco due to activities of the terrorist group, Boko Haram, Integrated Energy and Distribution Marketing Company had asked the government to buy back its 51 per cent stake in the firm.

The former core investor in Yola Electricity Distribution Company had on six occasions (November 10, 2013; August 27, 2014; October 15, 2014; April 9, 2015; April 30, 2015 and May 13, 2015) given notice of force majeure to the government.

The force majeure is a standard clause in most contracts and includes events like natural disasters, wars and other occurrences not within the power or control of the executing party that make implementation of a contract impossible.

Clause seven of the share purchase agreement stated that in a war situation where the core investor could not operate, it could invoke force majeure on issues beyond its control.

The Yola Disco covers Adamawa, Borno, Taraba and Yobe states. Three of the states, Adamawa, Borno and Yobe, have been mostly affected by the Boko Haram insurgency.

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