The Bureau of Public Enterprise (BPE) has signed a share sale and purchase agreement (SSPA) with Quest Electricity Nigeria, the new investor in Yola Electricity Distribution Company (DisCo).
This followed the payment of N19 billion purchase fee and a commitment to invest another N28 billion (US$68 million) over a period of two years.
Alex Okoh, the director-general of BPE, said this in a statement issued, on Monday in Abuja, by Amina Othman, head of public communications of BPE.
He also said the new investor was committed to improving the quality of life of the inhabitants in the north-east geopolitical zone, through aggressive investment drive, thereby providing an economic tool for combating the insurgency in the region.
Okoh said the investment would be utilised to carry out an extensive upgrade of the company’s electricity distribution network.
He added that it was expected that the investment would deliver results within a five-year period.
Okoh said the results included reduction in aggregate technical, commercial and collections (ATC & C) losses from the current level of 80 per cent, which was the highest in the industry, to 29 per cent which translated to a 51 per cent loss reduction.
According to the director general, “this investment will be utilised for the purpose of carrying out an extensive upgrade of the company’s electricity distribution network, in order to bring the business to the level of financial viability. It is expected that this investment will deliver results within a period of five years”.
He stated that the customer base would increased from 396,650 to 596,650, a 50 percent growth and a significant increase in energy supplied from 1,305 Gigawatt Hours (GWh), to 1,714GWh.
Okoh said as a result of the aggressive investment drive by the investor, it was expected that the increase in energy supply would stimulate economic growth and development in the region.
This, he said, would be through the creation of new industries and opportunities, attracting much needed investment and boosting job creation.
Okoh acknowledged the rigorous process of the negotiation, which took place in the wake of the COVID-19 pandemic and its crippling impact on economic activities as well as the challenging operational environment in the North East region of the country.
He, however, said it was a testament to the commitment and doggedness of the parties to deliver on the transaction and the high collaborative spirit between the federal government and the core investor.
“Moreover, it is a clear indication that there is still a significant level of interest on the part of investors in the Federal Government’s reform and privatisation programme,” he said.
“Notwithstanding the challenges in the power sector and the reaction that has trailed the privatisation process, this continued interest shows that the Federal Government took the right decision in reforming the power sector.
Adamu Mele, chairman of Quest Electricity Ltd., acknowledged the insecurity in the company’s area of franchise, but assured that it would work round it to transform the distribution company within a short time through infrastructure upgrade.