At a cost of over $1.15 billion, the Federal Government is presently conducting deals for the sale of five power plants under the National Integrated Power Projects through the Bureau of Public Enterprises, it was learned on Tuesday.
Despite the fact that individuals close to the development stated that the plants’ costs should surpass $5 billion based on worldwide standards, they also disclosed that the BPE intended to sell the facilities for slightly more than $1.1 billion.
In a brief phone call, our correspondent received confirmation from Ignatius Ayewoh, the interim Director-General of BPE, that “the transaction is ongoing” and “it is not concluded.”
Nonetheless, reliable sources within the agency identified the five power facilities as the Kogi-based 434 megawatt gas-fired Geregu II power plant, the Ondo-based 451MW Omotosho II plant, and the Ogun State-based 750MW Olorunshogo II plant.
Other examples include the 451MW Benin-Ihovbor facility in Edo State and the 563MW Odukpami power plant in Calabar, Cross River State.
According to rumors, the Omotosho plant, which has four turbines for producing electricity, would sell for roughly $85 million, while the Olorunsogo NIPP, which also has four turbines, would cost $170 million.
The Calabar Odukpami plant with five turbines would fetch roughly $260 million, the Benin-Ihovbor facility with five power-generating turbines would fetch $420 million, and the Geregu plant with four turbines would fetch $215 million.
“These are Siemens turbines, and each turbine can produce approximately 115MW of electricity,” one of the sources—who begged to remain anonymous on the grounds of insufficient authorization—explained.
The official continued by explaining that building a plant with a 1MW capacity would cost roughly $1 million. She emphasized that if the five NIPP facilities were valued similarly, their total cost would exceed $5 billion.
However, it was discovered that the price of building a 1 MW power plant varies based on a number of variables, such as the power plant’s kind, location, and technological improvements.
However, depending on the technology, building a 1 MW power plant can cost anywhere from $1 to $2 million per MW for a solar power plant.
It ranges from $1.5 million to $2.5 million per MW for wind generating plants. It is between $1 and $2 million per MW for natural gas-fired power plants, like the NIPPs, and between $2 and $3 million per MW for coal-fired power plants, according to another industry source.
After more than two years of disagreements and legal wrangling over the sale of the NIPP facilities under the management of the Niger Delta Power Holding Company, the parties to the arrangement came to an agreement in December.
The federal, state, and local government councils own the NDPHC, a power generation and distribution corporation that is in charge of NIPP implementation.
In an interview with media in Abuja, former Bureau of Public Enterprises Director-General Alex Okoh revealed the arrangement between the federal government and the states on the NIPP plants. Some groups, however, were against the disclosure.
The Bureau of Public Enterprises has been discussing and planning to sell the NIPPs for a number of years; the specifics and the intended sale price have changed over that time.
The National Council on Privatization authorized the fast-track sale of five NIPPs in April 2021. At the time, the estimated worth of these five plants was not made available to the general public.
The Nigerian National Petroleum Corporation signaled that the transaction was still moving forward in March 2022 by expressing interest in purchasing a number of NIPPs.
A deal confirming the sale of five NIPPs between the federal government and the states was verified in December 2022 by Okoh, the former head of BPE.
The estimated revenue from the transaction was about N260bn, or roughly $600m. Nonetheless, a number of sources as well as CSOs voiced worries that this sum wouldn’t have a major effect on the then-rising budget deficits.
According to the interim director general of the BPE, the sale of the NIPPs has not yet been completed as of today. Additionally, the management organization for the NIPPs, Niger Delta Power Holding Company, has not verified its sale.
It should be noted, however, that although the cost of the NIPPs has not been officially confirmed, some sources have suggested that the early estimates for each NIPP may have varied from $300 million to $500 million.