Three years after emerging as the preferred bidder for Afam Power Plc, Taleveras Group failed to complete the acquisition of the power plant, leading the Federal Government of Nigeria to revoke the sale in 2016. Despite an initial payment of $64 million, the deal collapsed due to a combination of regulatory hurdles, gas supply constraints, and government policies, marking one of the most significant setbacks in Nigeria’s power sector privatization.
Taleveras’ $260 Million Bid and Initial Hurdles
Taleveras, an energy and trading company with interests spanning oil, gas, and power infrastructure, won the bid for Afam Power Plc in 2013 with a $260.05 million offer, beating TES Power Limited, which had bid $222.9 million. The bid was part of Nigeria’s broader effort to privatize power assets following the unbundling of the Power Holding Company of Nigeria (PHCN).
Taleveras partnered with a consortium that included:
• Alstom Nigeria Limited – Power turbine supply, operation, and maintenance.
• Alstom Group (France) – A global leader in power generation technology.
• Taleveras Petroleum Trading BV (British West Indies) – A major player in crude oil and petroleum trading.
• Rivers State Government – Held a minority stake in the consortium.
By December 23, 2013, Taleveras signed a Power Purchase Agreement (PPA) with the Bureau of Public Enterprises (BPE) to officially take over Afam Power. However, the deal stalled before reaching full financial close.
Key Reasons Why the Acquisition Failed
1. Lack of Gas Supply Agreement (GSA)
One of the biggest hurdles that derailed the sale was the absence of a Gas Supply Agreement (GSA). Afam Power, like most gas-fired plants in Nigeria, depended on a steady supply of natural gas. However, at the time of the sale, the government had not finalized a gas supply contract with the new owners. Without guaranteed gas, the power plant could not generate electricity efficiently, making the acquisition unattractive.
2. Government’s Treasury Single Account (TSA) Policy and Fund Mop-Up
Taleveras had already paid $64 million into an escrow account, awaiting the completion of the acquisition process. However, in 2015, under the administration of President Muhammadu Buhari, the Federal Government implemented the Treasury Single Account (TSA) policy, which required all government revenue to be swept into a central account.
As part of this policy, the N18 billion ($65 million equivalent) in the escrow account was mopped up, effectively freezing the transaction. With the funds no longer available, the privatization process could not move forward, and the Bureau of Public Enterprises (BPE) was unable to complete necessary processes.
3. Taleveras’ Failure to Make Full Payment
Despite securing the preferred bidder status, Taleveras did not meet the full financial obligations required for the acquisition. The BPE required successful bidders to make a 75% balance paymentafter the initial deposit. However, with the lack of a Gas Supply Agreement and government interference in privatized assets, Taleveras delayed its payments, waiting for the resolution of key issues.
4. Revocation of the Deal in 2016
By 2016, after years of delays and uncertainty, the Federal Government revoked Taleveras’ bid. The National Council on Privatisation (NCP), led by Vice President Yemi Osinbajo, cited non-completion of payment and inability to secure gas supply as key reasons for the revocation. The deal’s collapse was part of a larger challenge in Nigeria’s power privatization, where investors struggled with funding constraints, policy inconsistencies, and infrastructure bottlenecks.
The Aftermath: A New Bid Process for Afam Power
Following the failed sale, the NCP re-opened bids for Afam Power Plc in 2017. By 2019, Transcorp Power Consortium emerged as the new preferred bidder, offering N105.3 billion ($343.6 million)—a higher bid than Taleveras’ 2013 offer.
Unlike Taleveras, Transcorp Power committed to investing an additional $350 million to improve operations, a factor that contributed to their successful takeover. The approval of Transcorp’s bid finally ended the uncertainty surrounding Afam Power’s ownership, with the company set to integrate the plant into its growing portfolio.
Conclusion: A Case Study in Nigeria’s Power Sector Challenges
The Taleveras-Afam Power debacle highlights some of the biggest challenges facing Nigeria’s power sector privatization:
• Lack of regulatory clarity (especially on gas supply agreements).
• Government interference in privatized assets, including the TSA fund mop-up.
• Difficulty in securing financing and full payment due to sector instability.
While Transcorp Power eventually took over Afam Power, the failed Taleveras acquisition remains a cautionary tale for investors in Nigeria’s energy sector, proving that without clear regulatory frameworks, even billion-dollar deals can collapse.
