The Bureau of Public Enterprises (BPE) and Quest Electricity Nigeria Limited – the new investor in the Yola Electricity Distribution Company (YEDC) have signed a Share Sale and Purchase Agreement (SSPA) for the privatisation of YEDC.
At the agreement-signing ceremony in Abuja, the Director General of BPE, Mr. Alex Okoh, revealed that in addition to paying the purchase fee of N19 billion, the new investor has committed to a performance improvement programme which will involve an investment of US$68 million (N28 billion) over a period of two years.
In a statement from the privatisation agency, he said Quest Electricity 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.
According to him, “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.”
Okoh added that it is expected that this investment will deliver results within a period of five years.
These results, he disclosed, included reduction in ATC & C losses from the current level of 80 per cent (which is the highest in the industry) to 29 per cent hich translates to a 51 per cent loss reduction.
Others are growth in customer base from 396,650 to 596,650 (which represents a 50 per cent increase); and a significant increase in energy supplied from 1,305 GWh to 1,714GWh (an increase of over 400 GWh or 31 per cent increase.
He added that as a result of the aggressive investment drive by the investor, t is expected that the increase in energy supply will stimulate economic growth and development in the region through the creation of new industries and opportunities as well as attracting much needed investment, and boosting job creation.
Noting 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 the challenging operational environment in the North East region of the country, Okoh 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
Also speaking, the Chairman of Quest Electricity Nigeria Limited, Alhaji Adamu Mele noted the insecurity in 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.
Following the approval of the National Council on Privatisation (NCP) for the privatisation of the Yola Electricity Distribution Company (YEDC) and the conclusion of a competitive and transparent bidding process involving local and international investors, Quest Electricity Nigeria Limited emerged as the Preferred Bidder with a bid price of N19 billion.