Power Hungry Nigeria seeks Investors

Matatu thinks Nigeria seems to be getting serious about its electricity supply. Through a joint venture between the federal government, local governments and state governments called The Niger Delta Power Holding Company, Nigeria is divesting itself of the electricity production process. Ten medium-sized, gas fired power plants are up for sale – with the intention that private holders will sell electricity produced to the government to transmit. If it’s successful, it will revolutionise the Nigerian energy sector.

The Naija government seems very serious about achieving the goal of having the plants all ready for handover to investors by July 2014 and a London Roadshow for investors was the latest arena for demonstrating that seriousness. So, Matatu went along to see what the fuss was all about. Sadly Matatu found the conference did not entirely respect the seriousness of the occasion. This may not entirely be the fault of the organisers, Matatu understands co-ordinating these large events with big beasts of government [anywhere in the world] can be tricky on logistics. But it started late, and continued to run behind schedule, so much so that we were all rather harried for time by the time it came to Questions & Answers later in the day.

The location was the Intercontinental Hotel and if nothing else, the delegates came away with a very good lunch, and there were plenty of opportunities to hob-nob and make useful connections – though if you’re ever going to (or organising a conference at the Intercontinental Hotel, note that they rather cheaply, in this day and age, charge people for internet access).

Some delegates let Matatu know that they weren’t entirely impressed by the make-up of the audience – there were too many Nigerians they suggested – and not enough wealthy ones; some thought this suggested the deals for the purchase of the plants will ultimately be done mostly with Nigerian investors, and these roadshows are mainly a horse and pony show for the international media.

That said, officials at the event were keen to let Matatu know that there’s no restriction on foreign ownership [up to 80% of the shares] of the power plants; Matatu was impressed by the insistence of many of the speakers that this process would be completely transparent and without political favour, notably one speaker insisted that for the first time in Nigeria, “there is a transparent process. No political connections will help you.” Instead investors were exhorted to follow the RPF as their bible. RPF was just one number of the alphabet soup of Acronyms bandied about.

The organisation selling the assets is called The Niger Delta Power Holding Company or helpfully, NDPHC. The organisation facilitating the sale is called the Bureau of Public Enterprises, (BPE) – we won’t continue but there was also: The NBET, GACN, NGC, TCN and CPCS). All humour aside, this was a full-on initiative to assuage doubt and reassure investors that the entire process from gas supply to production of electricity, to transmission of the electricity to the power grid will be smooth, and ensure proprietors can make a profit.

Sadly for a roadshow whose sole objective was to raise awareness, the publicity before and after this conference leaves much to be desired; is this yet another instance where the Goodluck administration is doing good things, but isn’t pushing its message out very well? Whatever the case, external investors seem fairly willing to take a punt on the new frontier of privatised energy – Matatu met representatives from at least three different global banks scoping out the deals for their clients, including a number of Asian clients. We’re told the Hong Kong roadshow will be an even better happening – so if India or China buy up most of Nigeria’s electricity plants, you heard it here first.

The Niger Delta Power Holding Company – Investors Road Show was held on 12 June 2013 at the Intercontinental Hotel London. For more information about Nigeria’s power plant disposal, visit: http://www.nipptransaction.com

Short & Sweet on Mozambique

We went to this conference quite a while ago, and we have been remiss in writing it up, but because it was so good, we feel it’s necessary because of its  focus on the little talked about nation (at least in the UK) – of Mozambique. Matatu missed a fair bit of the conference but what we did catch was stimulating and lively. Delegates came from Lisbon and the UK – and there was a fair bit of back and forth about tax. Matatu certainly sensed a verbal wrestling match between the more ethical investors and the profit-driven ones. Matatu was impressed (?) relieved (?) to hear a number of delegates remind the audience that Mozambique is still a poor country – which needed as wide a tax base as possible just as much as it needed investors.
There was more on tax – mention was made of the difficulties of double-tax treaties, Mozambique’s double tax treaties with the United Arab Emirates and Mauritius were suggested as beneficial for business, as were Mozambique’s relatively stable government, which delegates seemed fond of comparing to Angola, till they were told both countries are really like Chalk & Cheese. Nevertheless, investors asserted they were bullish about Mozambique, and its prospects as a gateway into Central Africa. It was all rather extractives focused though, and Matatu would have liked to have seen some NGOs to balance some of the conversations. That said, there was a fair bit of discussion about education and skills, and some hints from delegates that there ample opportunities for UK companies to make some good links and help provide skills in Mozambique.

The forum was snazzily organised as a roundtable – with speakers and audience all together, which was a rather useful and intimate set up for building up trust – less effectively, there were no microphones, and so those speakers without a booming voice only shared their message with half the room. Aside from that, running at half a day – from 8.30am – 12.45pm – this was possibly the perfect pace and timing for a business conference. Matatu looks forward to more of this – though next time, we hope the food is as exciting as the prospects for investments in Mozambique.

The Mozambique Investment Forum was held on Thursday May 16th 2013 at the Institute of Directors. It was organised by 954 Consulting. www.954consulting.com 

Dele Meiji Fatunla

 

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