FG signs transaction pact with PHCN successor companies

The Federal Government yesterday signed transaction and industry agreements with successor companies of the Power Holding Company of Nigeria, PHCN, to kick start full commencement of reform of the country’s electricity supply industry.

The endorsement of the transaction agreement which marks the actual handover of the unbundled PHCN companies to core investors is coming a day after President Goodluck Jonathan approved a total of N384billion for the settlement of all outstanding benefits of PHCN staff.

The PHCN workers had insisted on payment of their full entitlements before government hands it over to the different successor companies that emerged in the privatization process.

Speaking at the signing ceremony yesterday at the State House, Vice President Namadi Sambo, who is also the chairman of the National Council on Privatization (NCP) said the first set of the agreements is on power purchase signed between the Nigeria Bulk Electricity Trading Company limited “Bulk Trader” and six legacy power plants.

NBET is a transitional institution designed to provide a credible and credit worthy offtaker of power pending the attainment of sustainable liquidity of the distribution companies.

Sambo who was represented by the Minister of power, Professor Chinedu Nebo said NBET also yesterday signed vesting contracts with all the 11 distribution companies.

Some of the Distribution companies include, Kann Cosortium handling the  Abuja power plant, Vigeo Power consortium (Benin), West Power $ Gas (Eko), Interstate Electric ltd (Enugu), Integrated Energy for ( ) and NEDC/KEPCO incharge of Ikeja.

According to the Vice President, another section of the agreements was the gas supply and aggregation     between Geregu, Sapele, Ugheli power plants and their respective gas suppliers.

The agreements signed also included that between Generating companies and the Transmission Company of Nigeria PLC which is expected to pave way for compensation to providers of services such as black start, spinning reserve and frequency support.

Among the generating companies recently approved by the NCP are Amperion handling Geregu,  Mainstream for (Kainji), North South (Shiroro) Transcorp/Woodrock (Ughelli) and CMEC/Eurafric for Sapele.

In his remark at the event, chairman of the technical committee of the NCP, Mr. Atedo Peterside said the successor companies are expected to within 15 business days after the signing of the sale and purchase agreement of the shareholder’s agreement, whichever is earlier, make down payment of 25 percent of the share purchase price.

Within 90 days after the signing, the successor companies are also required to pay the outstanding 75 percent of the share purchase price to complete the transaction.

Acting Director General of the Bureau for Public Enterprises BPE, Mr. Benjamin Dikki explained that all the successor companies would meet with the bureau to finalize an arrangement that gives them comfort without their taking over before full payment.

He assured that government was also making concrete arrangement to ensure adequate funding of the TCN to improve its capacity to evacuate power in order to give the generating companies and distribution companies as well companies the confidence that to operate effectively.