Brazilian Company Offers To Buy PHCN For $100 Billion

A Brazilian company has offered to buy the Federal Government’s stake in 17 Power Holding Company of Nigeria (PHCN) successor companies for 100 billion dollars (N15 trillion), Prof. Barth Nnaji, the Minister of Power, said.

Nnaji made the fact known in Lagos on Thursday at the 2011 Annual Conference of the National Association of Energy Correspondents (NAEC).

 “A Brazilian company, for instance, has offered to buy the Federal Government’s stake in the 17 PHCN
successor companies for 100 billion dollars  (N15 trillion),” he said.

Nnaji, represented by his Special Adviser on Media, Mr Cydon Adinuba, said that the National Council on Privatisation  (NCP) had approved and shortlisted potential bidders after receiving 331 applications.  

“With the inauguration of the Electricity Bulk Trading Company Board on Tuesday, the investors’ confidence has been further bolstered.

“The Bulk Trader, which enjoys the World Bank Partial Risk Guarantee (PRG), exists to give comfort and confidence to generation companies by guaranteeing power generating companies’ payment for all their products.

“It will cease to exist when the distribution companies mature enough by being credit worthy,” he said.

Nnajisaid that 40 firms were shortlisted to bid for the concession of the hydro stations, 87 shortlisted for thermal stations and 80 for the electricity distribution companies.   

“In spite of the global economic crisis and the reported decline in foreign direct investment, there has been a remarkable growth of international investors’ confidence in Nigeria’s power sector in the last one year,’’ he said.

Also, the Minister of Petroleum Resources, Mrs Diezani Alison-Madueke, said that the challenge facing the industry was for the government to create an enabling environment for it to strive.

Alison-Madueke, represented by Dr Earnest Nwapa, Executive Secretary, Nigerian Content Development and Monitoring Board (NCDMB), said that it would allow capital to flow inward and get retained for economic growth and development.

“I want to assure Nigerians and our international partners that the government has taken firm steps to address these concerns in a structured and sustainable manner,” the minister said.

She expressed concern over the huge capital flight in the oil and gas sector ,which had been blamed largely on many years of dependency on foreign products and services.

The minister said that this had cost the nation about 300 billion dollars (N45 trillion).

According to her, the oil industry currently needs to spend about 20 billion dollars (N30 trillion) annually.

She said that the major operators had not helped matters by reliance on the importation of goods and services.

The minister said that they had not made any effort to develop sustainable capabilities that would support life cycle operations in Nigeria.