Why we implemented five-year monitoring exercise in power sector

The Bureau of Public Enterprises (BPE) has revealed why it implemented a five-year monitoring exercise on privatised enterprises in the Nigerian power sector.

The Director-General of BPE, Alex Okoh, made this known during the presentation of a certificate of discharge to Transcorp Power Limited in Abuja on Monday.

Transcorp Power Plc, having fulfilled all the deliverables, and satisfying the requirements of the post-acquisition plan (PAP) compliance, got delisted from routine evaluation and monitoring exercises.

At the event, Mr Okoh stated that the monitoring exercise was designed to determine the level of performance of the respective core investors and to assess their levels of compliance with the operational thresholds and covenants enshrined in the performance agreement.

The monitoring exercise was also aimed at ensuring effective and efficient management of the privatised high utilities in the generation segment of the value chain.

He noted that the privatisation of state-owned enterprises is a consequence of the global paradigm shift from public ownership and management of public utilities to allow the private sector to play a more dominant role in leveraging its financial and management capacities.

As part of the 2013 privatisation exercise, Mr Okoh said Ughelli Power PLC executed the performance agreement on 21 August 2013, with the BPE.

He said the company committed to achieving specific improvement targets over a five-year lock-in period, which covered five key areas including available capacity, capital expenditure, human resources, health, safety, and environment, and corporate social responsibility.

Following the capacity determination and validation of Ughelli Power PLC by the consultants engaged by the National Council on Privatisation, it was determined that the company had achieved an available capacity of 680.8 megawatts, which surpasses the minimum performance target of 670 megawatts.

READ ALSO: BPE presents discharge certificate to Transcorp Power

Capital expenditure totalling N58.6 billion was the covenant established for phases one and two of the post-acquisition plan, while actual investments made by the current investor were in the sum of N83.85 billion.

All the agreed benchmarks on human resources, health, safety and environment, and corporate social responsibility have also been achieved.

After exceeding the minimum performance targets and fulfilling all the agreed obligations, the National Council on Privatisation approved the request from the BPE for Transcorp Power Limited to be approved for delisting from routine monitoring.

He congratulated the board and management of Transcorp Power on the milestones achieved in turning around the operations of the power generation enterprise and expressed hope for sustained collaboration in improving the outcomes in the power sector.