FG moves to sell Olorunsogo, Omotosho power stations

Posted by admin Latest Politics Wednesday, December 29th, 2010

The Federal Government is holding discussions with a consortium comprising Nigerian and Chinese companies, with a view to selling the Olorunsogo and Omotosho power stations under a buyout deal.

Sources close to the deal told our correspondent on Wednesday that the government settled for this option because it was becoming difficult for workers of the Power Holding Company of Nigeria to successfully run the plants.

“The plants have been shut down several times because the operating manuals of the stations are written in Chinese and the PHCN workers have been encountering difficulties in running the plants. So, the government thinks it will be better to sell them to the Chinese contractors, who installed the machines,” the top government source said.

“The vice-president is meeting with the consortium early next week to continue discussions on the conclusion of the deal,” the source added.

The plants were built under the National Integrated Power Projects.

Our correspondent gathered that the plants were already undergoing rehabilitation in preparation for their eventual sale to consortium.

It could not be confirmed at press time, the amount being offered for the two plants by the consortium.

A top official of the Bureau of Public Enterprises, who asked not to be named, also confirmed the development to our correspondent, adding that talks were ongoing on the deal with the consortium.

“Government wants to ensure that the nation gets optimum performance from the two power stations; that is why it is looking at the option of outright sale of both plants,” the official said.

The Olorunsogo power station has an installed capacity of 300 megawatts, while the Omotosho plant has an installed capacity of 266MW.

The plan of the Federal Government on the outright sale of the Omotosho and Papalanto National Integrated Power Project plants differs from its plan to sell 51 per cent of its stakes in the old thermal plants to core investors under the reform programme for the power sector.

The government also plans to sell 51 per cent of its stake in the distribution companies to investors and grant concession to private companies to run the three hydroelectric power stations.

However, the transmission grid will still be owned by the government but will be managed by the private sector.

In the power road map, Nigeria is targeting 14,000MW power generation by 2013 and 40,000MW by 2020.

The country currently generates an average of 3,500 megawatts of electricity against a demand in excess of 25,000MW.

“Self-generation of electricity (from diesel and petrol generators) is conservatively estimated at a minimum of 6,000MW, which is more than twice the average output from the grid during 2009,” the road map stated.

Nigeria’s average per capita energy consumption is just 129 kilowatt hours, compared to 239kWh in Ghana, 491kWh in India and 12,607kWh in the United States, according to government estimates.

Brazil has 100,000MW of grid-based generating capacity for a population of 201 million people; while South Africa also has 40,000MW of grid-based generating capacity for a population of 50 million people.wp_posts