Chrome Energy Joins Consortium Partners in Signing of Agreements for Private Takeover of Enugu Distribution Company
Promises to set the pace for electricity distribution in Nigeria with high efficiency and corporate governance standards
ENUGU, NIGERIA, March 4, 2013 — The Interstate Electrics consortium of business interests led by Chrome Energy, a subsidiary of The Chrome Group (www.thechromegroup.net), a leading West African oil and gas conglomerate, has signed agreements with the Federal Government of Nigeria that pave the way for privatization of Enugu Distribution Company (Disco). In October, the National Council on Privatization (NCP) and the Bureau of Public Enterprises (BPE) determined that Interstate Electrics Limited was the preferred bidder for the Enugu Disco.
In addition to Chrome Energy, the Interstate Electrics Limited consortium includes Metropolitan Electricity Authority (MEA) of Thailand and Power House International Limited. The consortium recently signed transaction and industrial agreements with the Federal Government for the purchase of the successor generation and distribution companies of the Power Holding Company of Nigeria (PHCN).
Plans call for MEA to operate Interstate Electrics while Chrome Energy and Powerhouse International are co-investors.
As part of the due diligence that preceded the signing of agreements, a delegation representing select distribution companies of PHCN visited MEA and its sister company, Provisional Electricity Authority of Thailand (PEA), which distributes power in the rest of the regions in Thailand. MEA is recognized among the most efficient developing world power distribution companies with record technical and commercial losses of below five percent during the past eight years.
“This is a great step forward for those served by Enugu Disco and for all of Nigeria,” said Sir Emeka Offor, chairman of The Chrome Group. “Apart from the consortium’s collective financial capability, we bring solid experience, including MEA’s outstanding record of providing power services in Bangkok, Nonthaburi, and Samut Prakan Provinces in Thailand for more than 50 years.”
Enugu Disco is responsible for distributing electricity in Enugu, Abia, Anambra, Ebonyi and Imo States. According to information from the Federal Government, Enugu Disco recently delivered a total of 1,920 GWh to about 545,000 customers.
This signing is the latest step in the Nigerian government’s plan, announced in 2010 by President Goodluck Jonathan, to unbundle the PHCN and sell it off as 11 distribution and six generation companies. The DISCOs are responsible for delivering electricity to end-users and collecting payment.
President Jonathan has promised a tenfold increase in electricity by 2020. The sale of the ten Discos to the successful bidders is expected to net the Federal Government a sum of N197.25 billion ($1.25 billion USD).
The Chrome Group, founded in 1994 by Sir Emeka Offor, is one of Nigeria’s leading indigenous multinational businesses with subsidiaries operating in oil and gas exploration and production, oil and gas servicing, engineering, insurance, logistics and power industries.