The Federal Government, through the Bureau of Public Enterprises, is now conducting transactions to sell five power plants under the National Integrated Power Projects for around $1.15 billion.
Although individuals involved with the development said that the cost of the plants should surpass $5 billion based on worldwide benchmarks, they revealed that the BPE was aiming to sell the facilities at a price that is little higher than $1.1 billion.
The acting Director-General of BPE, Ignatius Ayewoh, did not disclose the cost for the five plants but acknowledged that “the transaction is ongoing,” adding that “it is not concluded.”
However, credible sources at the agency identified the five power plants as the 434 megawatt gas-fired Geregu II power plant in Kogi, the 451MW Omotosho II facility in Ondo, and the 750MW Olorunshogo II plant in Ogun State.
Other projects include the 563MW Odukpami power plant in Calabar, Cross River State, and the 451MW Benin-Ihovbor facility in Edo State.
The Omotosho plant, which has four turbines for producing electricity, is reportedly valued at approximately $85 million, whilst the Olorunsogo NIPP, which also has four turbines, is estimated to cost $170 million.
The Benin-Ihovbor facility, which has five power generating turbines, would be sold for $420 million; the Calabar Odukpami plant, which has five turbines, would be sold for around $260 million; and the Geregu plant, which has four turbines, would cost $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 permission, stated.
The official explained that it would cost approximately $1 million to build a plant capable of producing 1MW of power, even though it varies based on a number of factors, including the type of power plant, location, technological improvements, and so on.
“However, a standard range for the cost of establishing a 1MW power plant using various technologies is that a solar power plant costs between $1 million and $2 million per MW.
“A wind power plant costs between $1.5 million and $2.5 million per megawatt. Natural gas-fired power plants, such as NIPPs, cost between $1 million and $2 million per MW, while for coal power plants, it is between $2m and $3m per MW,” another source in the sector explained.
Former BPE boss, Okoh announced a deal between the Federal Government and states to sell five NIPPs in December 2022.
He projected the deal to produce more than N260bn (about $600 million). However, several sources and civil society organizations raised concerns that this amount would have little impact on the mounting budget deficits at the time.
As of today, according to the acting DG of the BPE, the sale of the NIPPs has not been concluded. The Niger Delta Power Holding Company, which manages the NIPPs, has not verified the transaction.
Meanwhile, it should be noted that while there is no official confirmation on the cost of the NIPPs, some sources claim that the early estimations for individual NIPPs could have ranged from $300m to $500m.
