TATA Power take steps into Nigeria for the discom business

The largest private utility Tata Power has bagged a contract to provide technical services to Benin Distribution Company of Nigeria, a top official said.

This marks the company’s foray into the power distribution segment in a foreign country, Tata Power Managing Director Anil Sardana

The Tatas are the second domestic discom to enter Nigeria after the R P Sanjiv Goenka Group flagship CESC, which had bagged a distribution rights for Port Harcourt in the Northwestern African nation.

Sardana said the contract was won by the company’s subsidiary Tata Power Delhi Distribution (TPDDL), which has entered into an agreement with three Nigerian firms — Vigeo Power, Gumco and Africa Finance Corporation — to act as technical service provider in network planning, supervision of implementation plan and improvement of efficiencies of the discom, Benin Distribution Company.

The Nigerian government has decided to privatise 11 state-owned discoms as part of improving the power sector.

TPDDL had bid for Eko and Ikeja discoms as a member of a Nigerian consortium called Oando. For Benin discom, the company had formed a consortium with Viego Holding.

The contract negotiations for the project are under progress with Nigeria’s Bureau of Public Enterprises, Sardana said.

“At present, on ground technical planning has commenced along with preparation of drawing, floating of certification for buying equipment etc,” Sardana said without disclosing the cost of the Project.

On the company’s investment plans for this project, he said: “Investment from our side will be very little at this stage, as investment will have to come from the promoters. As of now, TPC will continue to be the technical and O&M managers. But in future, TPC would also have the right to own the discom, if they wish so.

“There is an arrangement whereby if we like the venture after a year or two, we have the right to invest or actually take over it as the owners,” he added.

With many projects in the country getting stuck for want of clearances and lack of fuel linkages, a piqued TPC had earlier said it will focus more on opportunities outside for growth and set up a search team to look for such opportunities outside India.