The Federal Government, through the Bureau of Public Enterprises (BPE), is in the process of selling five power plants under the National Integrated Power Projects (NIPP) for an estimated total of $1.15 billion. Sources familiar with the matter revealed that while international benchmarks suggest a higher valuation exceeding $5 billion, the BPE is considering a price slightly above $1.1 billion for the facilities.
The acting Director-General of BPE, Ignatius Ayewoh, confirmed that the transaction is currently underway but emphasized that it has not been concluded. He refrained from disclosing the specific cost for the five power plants, citing an ongoing meeting.
The power plants earmarked for sale include the Benin-Ihovbor plant with five power-generating turbines, valued at $420 million; the Calabar Odukpami plant with five turbines, expected to be sold for about $260 million; and the Geregu plant with four turbines, slated for $215 million. These plants feature Siemens turbines, each capable of generating approximately 115MW of electricity.
While the cost estimation for constructing a 1MW power plant can vary based on factors such as technology, location, and type of power plant, industry sources suggest a general range. For solar power plants, it falls between $1 million to $2 million per MW; wind power plants range from $1.5 million to $2.5 million per MW; natural gas-fired power plants, like the NIPPs, are estimated between $1 million to $2 million per MW; and coal power plants typically range between $2 million and $3 million per MW.
In December 2022, The PUNCH reported that the Federal Government and 36 state governors reached an agreement to sell the five power plants under the NIPP to fund the 2023 budget. The agreement followed over two years of disputes and legal battles regarding the sale managed by the Niger Delta Power Holding Company.
Former Director-General of BPE, Alex Okoh, had disclosed the agreement, projecting that the sale would generate over N260 billion (approximately $600 million). However, concerns were raised about the impact of this amount on rising budget deficits at the time.
The sale of NIPPs has been on the BPE’s agenda for several years, with evolving details and target sale amounts. In April 2021, the National Council on Privatisation approved the sale through a fast-track strategy. The Nigerian National Petroleum Corporation expressed interest in acquiring some NIPPs in March 2022, indicating progress with the sale. As of now, the sale has not been finalized, and there is no official confirmation on the cost, with initial estimates speculated to range from $300 million to $500 million for individual NIPPs.
