BPE Issues Firm Letter For Power Plant Sale

The Bureau of Public Enterprises (BPE) has given an offer letter to CMEC-Pacific, for a Power Purchase Agreement (PPA) for the sale of the Omotosho Power Plant.

According to a statement signed by the Head of Public Communications of the BPE, Mr Chigbo Anichebe, in Abuja, the transaction is through a debt-equity swap process.

The statement quoted the bureau’s Director-General, Mr Benjamin Ezra Dikki, as saying it was in fulfilment of the decision of the National Council on Privatisation (NCP), stressing that the council had approved the sale at its last meeting held on February 28.

“NCP had approved that CMEC-Pacific pay 217,531,507.79 U.S. dollars for the power plant.

He said, the net total amount accruable to the Federal Government for the plant would be 82,336,179.42 U.S dollars, given that 30,325,386 U.S. dollars would be deducted from the capital cost for the construction of a switch yard for the Transmission Company of Nigeria (TCN) .

It will be recalled that phase one of the Omotosho plant having a capacity of 335MW, was constructed in 2002.

The total price under the turnkey contract was 166,724,578 U.S. dollars.

The Federal Government funded 35 per cent of the cost while the balance of 65 per cent was financed through vendor financing.

This was provided by the China National Machinery and Equipment Import and Export Corporation (CMEC) at an interest rate of six per cent per annum.