FG Revives Sale of 10 NIPP plants in New Economic Plan
It is indeed good news for proponents of public sector privatization as the Federal Government has announced that it would conclude the sale of 10 brand new electricity generation plants built under the National Integrated Power Projects (NIPPs) by the Niger Delta Power Holding Company Limited (NDPHC) in line with its recently launched Economic Recovery and Growth Plan (ERGP).
The government had tried to sell off the $5.7 billion plants to investors who were shortlisted after a competitive bid process in 2014, but the transactions were stalled following consistent attacks on gas supply pipelines that have rendered the new power plants redundant, as well as preferred investors’ claims that the government had not lived up to its pre-transaction pledge to ensure uninterrupted gas flow to the plants.
Following from this, the government subsequently stated that it would sell off the plants on a one-by-one basis, starting with three of the plants – 634 megawatts (MW) Calabar, 506MW Geregu and 513MW Omotosho power plants.
According to the program of ERGP, which President Muhammadu Buhari, recently launched in Abuja, showed that conclusion of the NIPP privatization would be part of the several intervention efforts in the power sector that the government’s economic recovery programme would pursue.
The government disclosed in the ERG Plan that it would target increasing power generation by optimizing operational capacity, encouraging small scale projects, and pursuing long-term capacity increase as well as improving the commercial viability of the legacy generation and distribution companies.
The federal government would, also in the ERGP, work to restore lost gas supply through the Gas Flare Commercialisation Programme, produce strategy towards elimination of gas infrastructure vandalism, complete major gas infrastructure lines to plants and main trunk lines to facilitate gas supply for power generation, as well as improve the financial capability of the Nigerian Bulk Electricity Trading Plc (NBET) to support the electricity market.
Government, according to the economic recovery programme would also strengthen the governance framework and capacity of sector agencies, introduce strategy for capital market and banking programmes that ensure all upstream industry operators get paid for each contract, and review the gas pricing structure to recover all prudent costs as services improve and give willing developers access to under-developed gas resources.