Preffered bidders pay 25% for AfamGenco, Kaduna Disco

The preferred bidders for Afam Generation Company (Genco) and the Kaduna Distribution company (Disco) who emerged as winners recently have paid up their 25 percent acquisition sums, the Bureau of Public Enterprise (BPE) has said.

Director General of BPE, Mr Benjamin Dikki disclosed this yesterday at the sidelines of a technical meeting between the new owners of the Gencos and Discos, and the Nigerian Bulk Electricity Trading Company (NBET) in Abuja.
Dikki said the 75 percent balance of the sum was to be paid up within six months.
“The preferred bidders for Kaduna and Afam utilities have paid the 25% on due date. They now have to pay the balance of 75% in another six month or so,” he said.
He said the technical meeting was held to clarify the provisions of the Power Purchase Agreement (PPA) and the Vesting Contracts (VC) entered into by the Gencos and the Discos with the NBET.

He said it was also part of the BPE preparatory efforts for a smooth transition to the Transition Electricity Market (TEM) slated for March 1, 2014.
TEM is the stage characterised by emerging competitions for the electricity market where all agreements including the VC, PPA, Share & Purchase Agreement (SPA), and the Gas Supply Agreement (GSA) would be actively adhered to by the market participants.
Dikki also informed that the BPE was partnering with the Nigerian Electricity Regulatory Commission (NERC) to monitor the new owners beginning from May in the post privatisation era.

“The Share Purchase Agreement (SPA) gives a six-month period to allow the new owners to settle in. Already, we have commenced serious activities to prepare us for that purpose.”

Also speaking, the Managing Director of NBET/Bulk Trader, RumundakaWonodi, said there were misconceptions by the new owners on terms and conditions for the contracts.

“We got comments from Gencos calling for changing the terms and conditions of the Vesting Contracts as they thought the Bulk Trader should take some risks instead of passing it on to them,” he said.
He said there was a “take or pay obligation for gas” in both the PPA and the VC to ensure that any gas cost coming through the PPA to the Bulk Trader would be passed down to the Discos through the Vesting Contract.

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