Syndication, Club deals likely to finance power sector

 

 

Syndication and or club deals, have emerged as the preferred avenues for local
banks to meet the financing needs of new multi-billion dollar investments in the
power sector, occasioned by the recent power reforms which saw the emergence of
bid winners for the privatisation of the industry, BusinessDay has learnt.

Meanwhile, Spanco, one of the  technical partners to the reserve bidder for
Enugu Electricity Distribution Company, Eastern Electric, has lost its status as
electricity distribution  franchisee, having been stripped of all projects in
its home country, India.
This development may stall the take-off of the Enugu Disco, and indeed
discourage financiers, since the company does not have a competent technical
partner.

Regarding financial syndication deals, Nigerian banks which are already in
discussion with the generating and distribution companies, are  also in talks
among themselves to pool the requisite funds, since foreign banks are still
hedging to see how the projects go. Already the Gencos and Discos will Tuesday,
in Abuja, commence negotiations with the Bureau for Public Enterprises (BPE) on
possible ways to offset the bidding money for which 15 percent initial payment
has been made.

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