Impacts of Boko Haram frustrating operations of Yola Disco as FG plans resale
Indications have emerged that the Federal Government is set to offer two key power firms, Yola Electricity Distribution Company and Afam Power Plc, for sale to new core investors.
However, this will be the second time the government will be selling Yola Disco, which covers the key insurgency states and Taraba States.
The Yola Disco covers Adamawa, Borno, Taraba and Yobe states. Three of the states, Adamawa, Borno, and Yobe, have been mostly affected by the activities of Boko Haram and the subsequent war against the group.
Business Hilights Intelligence Unit (BHIU) uncovered that the first core investor in the Yola Disco, Integrated Energy Distribution and Marketing Company, had yet to be paid back the $146.8m it invested for 51 per cent stake in the firm about three years after it exited through the declaration of force majeure.
Declaration of force majeure in an operation means that forces beyond any kind of human control have taken over the system and operations can only restart when the forces are put under control.
Otherwise, the force majeure is a standard clause in most contracts and includes events like natural disasters, wars and other occurrences outside the power or control of the executing party that makes implementation of a contract impossible.
Clause seven of the Share Purchase Agreement stated that in a war situation where the core investor could not operate, it could invoke force majeure on issues beyond its control.
The Power Sub-Committee of the Technical Committee, National Council on Privatisation, recognised the reality of the force majeure.
The recommendations of the sub-committee were deliberated on by the technical committee of the NCP at its meeting in April 2015 and it also acknowledged the basis for the declaration of force majeure.
Currently, the Bureau for Public Enterprises (BPE) is in the process of obtaining approval from the National Council on Privatisation (NCP) for the appointment of transaction advisers who will be responsible for offering advisory services towards the sale of both Yola and Afam Power Plc.
Due to the difficulty in running the Yola Disco considering the deadly activities of the terrorist group, Boko Haram, Integrated Energy and Distribution Marketing Company had asked the government to buy back its 51 per cent stake in the firm.
The former core investor had on six occasions (November 10, 2013, August 27, 2014, October 15, 2014, April 9, 2015, April 30, 2015 and May 13, 2015) given notices of force majeure to the government.
The Yola Disco covers Adamawa, Borno, Taraba and Yobe states. Three of the states, Adamawa, Borno, and Yobe, have been mostly affected by the activities of Boko Haram and the subsequent war against the group.
