FG Sells 70% Egbin Power Plant To Korean Firm

FG Sells 70% Egbin Power Plant To Korean Firm

FG Sells 70% Egbin Power Plant To Korean Firm
The National Council on Privatisation (NCP) chaired by Vice President Namadi Sambo, at the Presidential Villa, Abuja, yesterday approved the sale of 70 per cent of Egbin power plant in Lagos to a Korean firm, KEPCO for $407.3 million.

This is even as Mr. Femi Otedola’s firm, Amperium Consortium, presented a confirmation of payment of $33 million including local component of N519.12 million into Bureau for Public Enterprises (BPE) account, being 25 per cent downpayment for acquiring 51 per cent of Geregu power plant.

Akin Akinfetiwa, CEO of Forte Oil, a partner of Amperium Consortium, made the public presentation at the end of the meeting to the Acting Director-General of BPE, Benjamin Dikki.

The firm was given 15 days grace, but it paid the purchase sum immediately after the approval was granted. Also, the NCP has approved a NIPOST reform bill that will make the postal agency to return to its role of regulating the industry and also as an operator.

But the two functions will be separated, as a postal commission will be created to act as the regulator. Addressing State House correspondents after the meeting which lasted for several hours, Chairman of the Technical Committee of NCP, Dr. Atedo Peterside, said that the Egbin power plant is currently valued at over $670 million, more than the $549 million of its 2007 value when the Federal Government began negotiations to sell only 51 per cent equity of the plant to the same firm.

On the Egbin power plant, Peteside said: “What we have done today, (Thursday) is after negotiations and approval by the NCP, is to agree to sell 70 per cent of the plant to KEPCO which is a South Korean company. “KEPCO will pay $407.3million. At the time the transaction was done in 2007, Egbin was valued at $549million and they actually paid a deposit of 10 per cent of the amount based on that valuation.

“Based on that valuation, we have agreed to more or less ratify that previous transaction. But we have done and increased transaction and they are paying a larger sum of money. The evaluation that we have done with Egbin at a value of $670million which is higher than the original evaluation of $549million.

“In total, they are going to pay $407million to the Federal Government and that evaluation was comparable to the evaluation that was done for Geregu, Sapele and Ugheli power plants.”

Also approved for sale as part of the plans to privatise the power generation plants are Omotosho (Ondo State) and Olorunsogo (Ogun State) to Chinese firms which are almost done with construction.

According to Peterside, it made sense to NCP to offer the plants on right of first refusal to the Chinese firms since they would naturally understand the plants better and have agreed to a sale price the council considered reasonable enough.

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