The Federal Government through the Bureau of Public Enterprises, BPE, is now carrying out transactions for the sale of five power plants under the National Integrated Power Projects at a cost of about $1.15 billion.
Sources familiar with the development, however, explained that the cost of the plants should exceed $5 billion based on international benchmarks. They revealed that the BPE was planning to sell the facilities at a price that is a little above $1.1 billion.
The acting Director-General, BPE, Ignatius Ayewoh, confirmed that the transaction is ongoing adding that it is not yet concluded.
Ayewoh, however, did not disclose the cost for the five plants.
Meanwhile, impeccable sources at the bureau named the five power plants to include the 434 megawatts gas-fired Geregu II power plant, located in Kogi; 451MW Omotosho II plant in Ondo; and 750MW Olorunshogo II plant in Ogun State.
Others include the 563MW Odukpami power plant in Calabar, Cross River State; and the 451MW Benin-Ihovbor plant in Edo State.
It was learned that the Omotosho plant, which has four power generating turbines, would be sold at about $85 million; while the Olorunsogo National Integrated Power Projects with also four turbines would cost $170 million.
The Benin-Ihovbor plant with five power-generating turbines would go for $420 million; Calabar Odukpami plant with five turbines would be sold at about $260 million; while the Geregu plant with four turbines would go $215 million.
“These are Siemens turbines and each of the turbine can generate about 115MW of electricity,” an official at BPE who pleaded anonymity said.
The official went ahead to explain that it would cost about $1 million to construct a plant that could generate 1MW of electricity, stressing that if the five National Integrated Power Projects plants were valued on this basis, they would cost more than $5 billion.
It was, however, gathered that the cost of constructing 1MW power plant vary depending on several factors, including type of power plant, location, technological advancements, etc.
“But a general range for the cost of constructing a 1MW power plant based on different technologies is that for a solar power plant, it is between $1 million to $2 million per MW.
“For wind power plant, it is between $1.5 million to $2.5 million per MW. For natural gas-fired power plant, such as the NIPPs, it is between $1 million to $2 million per MW, while for coal power plants, it is between $2 million and $3 million per MW,” another source in the sector explained.
In December 2022, the Federal Government and the 36 state governors agreed to sell five power plants under the National Integrated Power Projects and use the proceeds to fund the 2023 budget.
Parties in the deal reached the agreement in December 2023, after over two years of disputes and legal tussle as regards the sale of the National Integrated Power Projects plants being managed by the Niger Delta Power Holding Company, NDPHC.
The NDPHC, owned by the federal, state, and local government councils, is a power generation and distribution company that oversees the implementation of the National Integrated Power Projects.
The former Director-General, Bureau of Public Enterprises, Alex Okoh, had disclosed the agreement between the Federal Government and the states as regards the National Integrated Power Projects plants to journalists in Abuja. The disclosure was, however, opposed by various groups.
There have been discussions and plans for the sale of the National Integrated Power Projects by the Bureau of Public Enterprises for several years, with the specific details and target sale amount evolving over time.
In April 2021, the National Council on Privatisation approved the sale of five National Integrated Power Projects through a fast-track strategy. The estimated value of these five plants was not publicly disclosed at the time.
In March 2022, the Nigerian National Petroleum Corporation expressed interest in acquiring some National Integrated Power Projects, indicating continued progress with the sale.
In December 2022, the former BPE boss, Okoh, confirmed an agreement between the Federal Government and states for the sale of five NIPPs.
He projected the sale to generate over N260 billion (around $600 million). However, some many sources and CSOs expressed concerns that this amount wouldn’t significantly impact the rising budget deficits at the time.
As of now, and by what the acting DG of the BPE said, the sale of the National Integrated Power Projects has not been finalized. The Niger Delta Power Holding Company, which manages the National Integrated Power Projects, has also not confirmed its sale.
Meanwhile, it should be stated that while there is no official confirmation on the cost of the National Integrated Power Projects, some sources speculate that the initial estimates for individual National Integrated Power Projects could have ranged from $300 million to $500 million.
