FG Sets To Cash In $1 Billion From Sale Of Five Power Plants

Eko Hot Blog reports that the Bureau of Public Enterprises, representing the Federal Government, is involved in transactions aimed at selling five power plants linked to the National Integrated Power Projects.

It was gathered that the estimated value of this transaction is around $1.15 billion.

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Insiders knowledgeable about the matter clarified that, in accordance with international benchmarks, the plants’ value should surpass $5 billion. Nevertheless, they disclosed that the BPE intends to market the facilities at a slightly higher price, hovering around $1.1 billion.

Benin-Ihovbor Plant

In a brief telephone conversation with The Punch correspondent, the acting Director-General of the Bureau of Public Enterprises (BPE), Ignatius Ayewoh, confirmed that “the transaction is currently in progress.” He emphasised that the deal has not been finalised.

Ayewoh, however, opted not to disclose the specific cost linked to the five power plants, citing his current engagement in a meeting as the reason for being unable to provide additional details.

Nevertheless, reliable sources within the bureau have identified the five power plants involved in the transaction.

These include the 434 megawatts gas-fired Geregu II power plant in Kogi, the 451MW Omotosho II plant in Ondo, and the 750MW Olorunshogo II plant in Ogun State.

Additionally, the list comprises the 563MW Odukpami power plant in Calabar, Cross River State, and the 451MW Benin-Ihovbor plant in Edo State.

Reports indicate that the Omotosho plant, equipped with four power-generating turbines, is slated to be sold for approximately $85 million. Similarly, the Olorunsogo NIPP, which also features four turbines, is valued at $170 million.

The Benin-Ihovbor plant, boasting five power-generating turbines, is set to be priced at $420 million.

The Calabar Odukpami plant, equipped with five turbines, is estimated to be sold for around $260 million. Finally, the Geregu plant, with its four turbines, is expected to fetch a price of $215 million.

“These are Siemens turbines, and each of the turbine can generate about 115MW of electricity,” one of the sources, who pleaded not to be named due to lack of authorisation, stated.

The official further elaborated that constructing a power plant capable of generating 1MW of electricity would entail an expenditure of approximately $1 million. Emphasizing this point, the official noted that if the valuation of the five NIPP plants was based on this criterion, their collective cost would exceed $5 billion.

Calabar Odukpami plant

However, it has been gathered that the cost of constructing a 1MW power plant can vary significantly, influenced by factors such as the type of power plant, its location, technological advancements, and other relevant considerations.

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“But a general range for the cost of constructing a 1MW power plant based on different technologies is that for a solar power plant, it is between $1m to $2m per MW.

“For wind power plant, it is between $1.5m to $2.5m per MW. For natural gas-fired power plant, such as the NIPPs, it is between $1m to $2m per MW, while for coal power plants, it is between $2m and $3m per MW,” another source in the sector explained.

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