Otedola’s Geregu budgets N40bn to acquire BPE’s power plant, faces obstacle from reps, 15 firms

Geregu Power Plc has reiterated its plan to acquire one of the power generation companies on sale from the Bureau of Public Enterprises (BPE).

Femi Otedola’s investment vehicle, Amperion Power, which is a substantial shareholder in Geregu, has been listed among 16 companies bidding to acquire five National Integrated Power Projects (NIPPs).

Companies competing against Otedola for power plant

The Federal Government is looking to privatise the following power plants; Calabar Generation Company Limited, Cross River state, Omotosho Generation Company Limited, Ondo state, Olorunsogo Generation Company Limited, Ogun state, Benin Generation Company Limited at Ihovba, Edo state, and Geregu Generation Company Limited, Kogi state.

Pre-qualified bidders aside from Otedola’s firm are Ardova Plc, Sifax Energy, Quantum Megawatt Consortium, Geoplex Drillteq Limited and Mota-Engil Nig.

Others selected to bid for the power projects are Globeleq Africa Limited, Pacific Energy Company Ltd., Asfalizo Acquisition Limited, and Central Electric and Utilities Ltd.

Also on the list are Launderhill PJB, North South Power Consortium Unicorn Power Genco Limited, ENL Consortium Limited, Lauderhill Tata and Connaught Energy Services Limited.

Otedola goes to the debt market to fund bid for power plant

The billionaire is believed to be eyeing Geregu Generation Company Limited, Kogi state, to increase the capacity of Geregu Power Plant.

With 15 firms to compete against in the bidding rounds, Otedola’s Geregu approached the debt market to raise N40.08 billion to finance its bid and boost its chance of acquiring the firm’s preferred power plant.

Read also:Otedola’s Geregu generates lowest revenue in 3 years, loses N23.33bn to Shell’s force majeure

This was gathered from Geregu’s financial statement for the period of 2022 obtained by Ripples Nigeria. Geregu said it issued N40.085 billion unsecured corporate bond in July 2022, and the proceeds from the loan will be used to finance the acquisition.

“In July 2022, the company issued N40.085billion unsecured corporate bond for a 7-year tenor and at a coupon and effective interest rate of 14.5% and 14.7% respectively.

“The net proceeds would be used to finance the acquisition of one of the power generation companies which is currently in the final stage of bidding processes by the Bureau of Public Enterprises (BPE),” the statement sighted by Ripples Nigeria disclosed.

Controversy surrounds the sale of the power plants

Otedola’s plan to acquire the power plant might not materialise as the House of Representatives said the sale was unconstitutional and a disservice to Nigeria’s development.

The lower chamber is against the sale of the power plant, and the House made it known by summoning the Minister of Finance, Budget and National Planning, Zainab Ahmed, Minister of Power, Abubakar Aliyu, and the Director-General for the Bureau for Public Enterprise, Alex Okoh

The ministers were summoned days after Otedola’s company and other firms were announced as pre-qualified bidders on July 7, 2022.

“The House of Representatives has observed with grave concern, the proposed sale of the five National Integrated Power Plants namely Benin Generation Company Limited, Calabar Generation Company Limited, Geregu Generation Company Limited, Olorunsogo Generation Company Limited and Omotoso Generation Company Limited by the Bureau for Public Enterprise without due regard to constitutional principles and economic policy that informed the establishment of those power plants.

“The committee decried the proposed sale as unconstitutional and a disservice to all known principles of national development and the sharing equity among the three tiers of government,” the committee wrote in summon letters.

The House of Representatives didn’t immediately respond to Ripples Nigeria’s enquiry on its current position.

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