The Federal Government is set to offer two key power firms, Yola Electricity Distribution Company and Afam Power Plc, for sale to new core investors, investigation has shown.
For the Yola Disco, this will be the second time the government will be selling the firm which covers Borno, Adamawa, Yobe and Taraba States.
It was also learnt that the first core investor in the Yola Disco, Integrated Energy Distribution and Marketing Company, had yet to be paid back the $146.8m it invested for 51 per cent stake in the firm about three years after it exited through the declaration of force majeure.
The Head of Public Communications, BPE, Amina Othman, confirmed that both the Yola Disco and Afam Power Plc were up for sale to new core investors in a telephone interview with our correspondent in Abuja on Tuesday.
According to her, the privatisation agency is in the process of obtaining approval from the National Council on Privatisation for the appointment of transaction advisers who will be responsible for offering advisory services towards the sale of the electricity companies.
She said, “We are at the stage of obtaining approval for the engagement of advisers for both transactions (Yola Disco and Afam Power Plc).
“On the payment to the former investor in the Yola Disco, Integrated Energy and Distribution Marketing Company, the former investor is yet to be paid.”
Following difficulty in running the Yola Disco due to activities of the terrorist group, Boko Haram, Integrated Energy and Distribution Marketing Company had asked the government to buy back its 51 per cent stake in the firm.
The former core investor had on six occasions (November 10, 2013, August 27, 2014, October 15, 2014, April 9, 2015, April 30, 2015 and May 13, 2015) given notices of force majeure to the government.
The force majeure is a standard clause in most contracts and includes events like natural disasters, wars and other occurrences outside the power or control of the executing party that makes implementation of a contract impossibl
Clause seven of the Share Purchase Agreement stated that in a war situation where the core investor could not operate, it could invoke force majeure on issues beyond its control.
The Yola Disco covers Adamawa, Borno, Taraba and Yobe states. Three of the states, Adamawa, Borno, and Yobe, have been mostly affected by the activities of Boko Haram and the subsequent war against the group.
The Power Sub-Committee of the Technical Committee, National Council on Privatisation, recognised the reality of the force majeure.
The recommendations of the sub-committee were deliberated on by the technical committee of the NCP at its meeting in April 2015 and it also acknowledged the basis for the declaration of force majeure.
The PUNCH had in July 2015 reported that the Federal Ministry of Power had taken over the management and control of the electricity distribution company.
It also appointed Mr. Baba Mustapha, an engineer, to lead the company in the capacity of acting managing director. Before the appointment, Mustapha was a deputy director in the Ministry of Power.