FEC, New Investor Delay $146.8m Refund To Yola Disco
More than four years after the core investor in the Yola Electricity Distribution Company declared force majeure and returned the Disco to the Ministry of Power, the investor is yet to be reimbursed by the Federal Government.
Integrated Energy Distribution and Marketing Company had acquired 60 per cent equity in the YEDC after paying $146.8m.
The Yola Disco was successfully privatised and handed over to the core investor in 2013. However, a force majeure was declared in 2015 by the core investor citing insecurity in the North-East region of the country where the company covers.
Following this, the company was repossessed by the Federal Government.
However, it had not been possible for the core investor to be refunded since it could no longer continue running the electricity distribution company to realise its investment.
Our correspondent learnt that the core investor had made demand beyond what the government was ready to pay. This is one of the reasons that the reimbursement to the company has dragged for a long time.
Authoritative sources, who spoke to our correspondent on condition of anonymity, said that the matter had to go for arbitration before the Federal Government represented by the Bureau of Public Enterprises and the core investor arrived at a mutually agreed amount.
After the arbitration, however, the money has not yet been paid as the privatisation agency may be waiting for proceeds from the process of reselling the electricity distribution company to a new core investor.
At a recent bid opening ceremony, Quest Electricity Nigeria Limited, which was the sole bidder for Yola Electricity Distribution Company submitted an initial bid of N17.67bn.
However, the company reversed its bid at the second round when it was told that its bid did not meet the reserve price set by the National Council on Privatisation. It eventually won the bid with a bid of N19bn.
The deal, however, is yet to be concluded as the NCP normally chaired by the Vice President has not been reconstituted after the dissolution of the Federal Executive Council on May 28.
The YEDC is one of the 11 electricity distribution companies sold to private sector operators in a gale of reform of the nation’s power industry that unbundled the defunct monopoly, Power Holding Company of Nigeria.