FG To Refund Yola Disco Investors N26.9bn
The Federal Government is planning to refund the core investors in Yola Electricity Distribution Company the sum of N26.9bn.
The refund is expected to be made in the 2020 fiscal year.
The N26.9bn is part of the amount captured under the N10.9tn 2020 budget estimates submitted by President Muhammadu Buhari to the joint session of the National Assembly.
The YEDC is one of the 11 electricity distribution companies sold to private sector operators as part of reform of the nation’s power industry that unbundled the defunct monopoly, Power Holding Company of Nigeria.
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 through the Ministry of Power.
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.
It was learnt that the investor had made demand beyond what the government was ready to pay. This was said to be one of the reasons that the reimbursement had dragged for a long time.
Findings revealed 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.
However, after the arbitration, the money was not paid owing to revenue challenges.
While steps are already being taken by the privatisation agency to resell the electricity distribution company to a new core investor, the process has yet to be concluded.
At a recent bid opening ceremony, Quest Electricity Nigeria Limited, which was the sole bidder for Yola Disco 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 reserved price set by the National Council on Privatisation.
It eventually won the bid with N19bn. The deal, however, is yet to be approved by the NCP normally chaired by the Vice President.