FG to sell five power plants for $1bn

It was learned on Tuesday that the sale of five power plants under the National Integrated Power Projects is presently being handled by the Federal Government through the Bureau of Public Enterprises at an estimated cost of $1.15 billion.

The BPE planned to sell the facilities for slightly more than $1.1 billion, according to sources familiar with the development, despite the fact that the cost of the plants should exceed $5 billion based on an international benchmark.

In a brief phone conversation, our correspondent received confirmation that “the transaction is ongoing” and that “it is not concluded” from acting BPE Director-General Ignatius Ayewoh.

Because he quickly claimed to be in a hurry, the BPE boss withheld the cost of the five plants.
Perfect sources at the bureau, however, identified the five power plants as the 434 megawatt gas-fired Geregu II power plant in Kogi, the 451 megawatt Omotosho II plant in Ondo, and the 750 megawatt Olorunshogo II plant in Ogun State.

The 451MW Benin-Ihovbor plant in Edo State and the 563MW Odukpami power plant in Calabar, Cross River State, are two more.

The Omotosho plant, which has four turbines for producing electricity, is reportedly valued at approximately $85 million, whereas the Olorunsogo NIPP, which also has four turbines, is estimated to cost $170 million.

The five power-generating turbine Benin-Ihovbor plant would fetch $420 million; the five turbine Calabar Odukpami plant would fetch roughly $260 million; and the four turbine Geregu plant would fetch $215 million.
One of the sources, who begged not to be identified because they lacked authorization, said, "These are Siemens turbines and each of the turbine can generate about 115MW of electricity."

Constructing a plant that could produce one megawatt of electricity would cost roughly $1 million, the official continued, emphasising that the five NIPP plants would cost more than $5 billion if they were valued similarly.

Still, it was discovered that the price of building a 1 MW power plant varied according to a number of factors, such as the kind of plant, the location, technological developments, etc.

However, depending on the technology, the average cost to build a 1MW power plant ranges from $1 million to $2 million for a solar power plant.
It ranges from $1.5 million to $2.5 million per MW for wind power plants. It is between $1 and $2 million per MW for natural gas-fired power plants, like the NIPPs, and between $2 and $3 million per MW for coal-fired power plants, according to another industry source.

The 36 state governors and the federal government ultimately decided to sell five power plants under the National Integrated Power Projects and use the proceeds to fund the 2023 budget, according to a December 2022 report .

After more than two years of disagreements and legal wrangling over the sale of the NIPP plants under the management of the Niger Delta Power Holding Company, the parties to the agreement came to an agreement in December.

The federal, state, and local government councils own the NDPHC, a power generation and distribution company that is in charge of NIPP implementation.

In an interview with journalists in Abuja, former Bureau of Public Enterprises Director-General Alex Okoh revealed the agreement between the federal government and the states regarding the NIPP plants. Some groups, however, were against the disclosure.

The Bureau of Public Enterprises has been discussing and planning to sell the NIPPs for a number of years; the specifics and the intended sale price have changed over that time.

The National Council on Privatisation authorised the fast-track sale of five NIPPs in April 2021. These five plants' estimated worth was not disclosed to the public.
The Nigerian National Petroleum Corporation signalled that the sale was still moving forward in March 2022 by expressing interest in purchasing a number of NIPPs.

A deal confirming the sale of five NIPPs between the federal government and the states was confirmed in December 2022 by Okoh, the former head of BPE.

The estimated revenue from the sale was over N260bn, or roughly $600m. Nonetheless, a number of sources as well as CSOs voiced worries that this sum wouldn't have a major effect on the then-rising budget deficits.
The sale of the NIPPs has not yet been completed, according to the acting DG of the BPE's statement as of right now. Additionally, the sale has not been confirmed by the Niger Delta Power Holding Company, which oversees the NIPPs.

It should be noted, however, that although the cost of the NIPPs has not been officially confirmed, some sources have suggested that the initial estimates for each NIPP may have been between $300 and $500 million.