Nigeria To Sell 5 State-Owned Electricity Generation Companies Due To Budget Deficit

The Nigerian government and 36 state governors finally reached an agreement to sell five state-owned electricity generation companies in the first quarter of next year.

The government is looking to open bids for the five plants starting December, and reach financial close by the end of March 2023, said Alex Okoh, director-general of the Bureau of Public Enterprises, in an email to Bloomberg, Thursday.

It should be noted that the sale of the National Integrated Power Project (NIPP) plants was not due to technical incapacity, but rather to raise funds for the 2023 budget.

"The expectation (of BPE) in the fiscal plan for 2023 is N260bn and the key assets that we are looking at are the power assets. Five of the NIPP plants; incidentally we are reaching some understanding with the state governors for the sale of those five power plants," said Okoh, as per The Daily Post.

"Thankfully, last week we were able to resolve the issues with the governors. So for those assets, we are likely to reach the financial opening of the bids before the end of the year, which is maybe next week," he added.

Notably, President Muhammadu Buhari, in October 2022, had said that the 2023 budget deficit of N10.78 trillion would be funded through a variety of means such as borrowing, asset sales, and project-specific loans. He made the revelation while presenting the Appropriation Bill of N20.51 trillion for 2023 to a joint session of the National Assembly.

The power plants that are up for sale as part of the privatization process include the Geregu power plant, a 562-megawatt facility in Calabar, Cross River State, and the Olorunsogo power plant.

The final agreement for the sale of the NIPP plants was finally secured after years of dispute and legal wrangling.

The Nigerian Governors Forum (NGF), a key stakeholder in the NIPPs, recently rejected the sale of ten power plants listed for sale by the federal government. The governors, through their chairman Governor Aminu Tambuwal of Sokoto State, released a statement on Nov. 23, 2022, expressing their disapproval of the sale, Punch reported.

However, by mid-December, the NGF had completely changed its stance.