THE Bureau of Public Enterprises (BPE) has flagged of the process of the full deregulation of the nation’s electricity sub sector of the economy. BusinessWorld Intelligence can disclose that the privatization agency has registered a company for the sole purpose of purchasing electricity in bulk from electricity power generating companies.
The name of the new firm that analysts said would be a key player in the evolving power sector is Nigeria Bulk Electricity Trading (Nibet) Plc. Competent presidency sources said at the weekend that BPE has finished the registration process with the Corporate Affairs Commission (CAC) and is now awaiting formal licensing from the Nigeria Electricity Regulatory Commission (Nerc) to enable it start operations.
With this development, many dormant Independent Power Producers (IPPs) would now be revitalized as the market for the power these companies would generate is now guaranteed.
Analysts said the registration of the company less than three weeks after the launching of the roadmap for the power sector was a strong indication that government is now ready to match words with actions in tackling the parlous state of the nation’s power sector.
President Goodluck Jonathan had at the recent launch of the roadmap for the power sector in Lagos, directed the privatization agency to source for a bulk purchaser of electricity to be generated by the generation companies.
The Presidency source said that the Nibet Plc would be a transitional arrangement and would wind up operations as soon as the electricity sector is full deregulated. According to the source, Nibet would serve as an interface between electricity generation companies and electricity distribution firms.   Analysts said the registration of Nibet is a direct response to the worries of promoters of Independent Power Projects (IPPs) across the country. IPPs promoters had in the past raised the question of appropriate pricing and mode of sale of power that they would generate. BusinessWorld Intelligence can disclose that the setting up of Nibet would give the needed boost to individuals and corporate bodies wishing to go into power generation business.
Meanwhile, the privatization agency has announced that the privatization of the 18 successor companies of Power Holding Company of Nigeria (PHCN) is expected to be concluded by May next year. Ms Bolanle Onagoruwa, director general of BPE, dropped the hint recently at an inter-active session of key government officials with the private sector.
Onagoruwa stated that the next stage of the reform is to start an electricity market and would involve some level of liberalization. She noted that the privatization agency have started the process of engaging consultants through Quality Based Selection (QCBS) method.
She disclosed that some firms were invited to express interest in receiving Requests for Proposal (RFP) to form consortia as transaction advisers.
A transaction advisory consortium shall be led by a financial institution that possesses an excellent global investment banking pedigree. Other members of the consortium shall include a Nigerian financial institution with considerable investment banking experience, a Nigerian law firm with strong transaction advisory competencies, and accounting, engineering, and other relevant technical firms. A consortium must have considerable experience of electricity sector project finance and privatisation, globally and in Africa.