Federal Government Announces Plan To Offload Five Power Plants In $1 Billion Deal

Federal Government Announces Plan To Offload Five Power Plants In $1 Billion Deal....KINDLY READ THE FULL STORY HERE▶

The Bureau of Public Enterprises (BPE) is currently in the process of selling five power plants under the National Integrated Power Projects (NIPP), with a targeted transaction value of approximately $1.15 billion, sources revealed on Tuesday…….CONTINUE READING

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While insiders familiar with the matter indicated that the international benchmark for the plants’ cost exceeds $5 billion, the BPE is reportedly aiming to secure a deal slightly above $1.1 billion. Ignatius Ayewoh, the acting Director-General of BPE, confirmed the ongoing transaction but emphasized that it has not been concluded.

The five power plants identified in the transaction are the 434MW Geregu II plant in Kogi, the 451MW Omotosho II plant in Ondo, the 750MW Olorunshogo II plant in Ogun State, the 563MW Odukpami plant in Calabar, Cross River State, and the 451MW Benin-Ihovbor plant in Edo State.

According to sources within the BPE, the Omotosho plant, equipped with four power generating turbines, is expected to be sold for around $85 million, while the Olorunshogo NIPP with four turbines has an estimated cost of $170 million. The Benin-Ihovbor plant, featuring five power generating turbines, is priced at $420 million, the Calabar Odukpami plant with five turbines is valued at approximately $260 million, and the Geregu plant with four turbines is set at $215 million.

These plants utilize Siemens turbines, each capable of generating about 115MW of electricity, as per undisclosed sources. The estimated cost for constructing a 1MW power plant is $1 million, leading to speculations that the collective value of the NIPP plants exceeds $5 billion when assessed based on this metric.

However, it’s important to note that the cost of constructing 1MW power plants varies based on factors such as the type of plant, location, and technological advancements. For instance, solar power plants typically cost between $1 million to $2 million per MW, while natural gas-fired power plants, such as the NIPPs, fall in the range of $1 million to $2 million per MW.

The decision to sell these power plants was reached in December 2022, with the Federal Government and 36 state governors agreeing to use the proceeds to fund the 2023 budget. The Niger Delta Power Holding Company, responsible for managing the NIPPs, is yet to confirm the sale, and as of now, the transaction remains pending. Previous estimates hinted at a sale generating over N260 billion (approximately $600 million), though concerns were raised about its impact on the budget deficit. The current status of the sale and the confirmed cost of the NIPPs remain unconfirmed as discussions continue.

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