The quest to have the private sector as the driver of electricity power delivery in the country received a presidential seal on April 22, 2013, with the issuance of certificates of transactions to successful private bidders for the PHCN unbundled companies. The certificates represented the 25 per cent down payment of the bid price.
By personally supervising the process, President Goodluck Jonathan signalled that the deal was done and there was no going back. The significance of such a confidence-building measure was evidently not lost on the private investors. An elated Tony Elumelu, representing Trancorp Plc, one of the preferred bidders, stated that, with the commitment shown by the Government, his company was ready to pay the outstanding bid price immediately, if required to do so.
Perhaps the reason for his elation can be better appreciated when viewed in the light of some of the concerns that serve as a disincentive for private sector participation in the privatisation exercise. These concerns include fear of breach of obligations and/or agreements by government, and the need for a predictable and consistent policy.
As part of events marking the issuance of the power transactions certificates were two other significant businesses, which also signal government’s determination to ensure that its power sector reforms succeed. One is the signing of the World Bank’s partial risk guarantee for gas supply to Egbin Power plant, while the other is the execution of the template on Power Purchase Agreement. For the uninitiated, these may not seem to mean much. But not so for those who have being schooled and toughened in the dynamics and complexities of the electricity market.
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