Energy Sector Privatisation in Nigeria: GvW Graf von Westphalen advises Chinese State-Owned Enterprise

Shanghai Municipal Electric Power Company (SMEPC) successfully participated in the privatisation process of the electrical generation sector in Nigeria as part of a consortium. The consortium was selected as preferred bidder for the Nigerian power plant Geregu.

SMEPC is an affiliate of the Chinese state-owned enterprise State Grid Corporation of China (SGCC). The consortium company is Amperion Power Distribution Company Ltd., with its headquarters in Nigeria, in which the consortium members Forte Oil PLC and BSG Resources (BSG) are shareholders. The consortium was chosen as the preferred bidder for the Nigerian 414 megawatt power plant Geregu in the framework of several tendering procedures. The purchase price is approx. USD 128 million. The execution of the transaction is still subject to regulatory approval for SMEPC.

BSG is a global exploration company focusing on oil and gas, mining, metals and energy. Forte Oil PLC is one of the most important companies in the Nigerian oil industry.

State Grid is the world's largest energy supplier and ranks seventh on the 2012 Fortune 500 list of highest revenue companies. The state-owned enterprise is currently on a global course of expansion. In the Philippines State Grid has purchased a 25-year licence to run the nationwide power grid. In Brazil, State Grid now holds shares in various power grids. State Grid is recently purchasing a 41 percent stake of the Australian ElectraNet. In Europe, this year State Grid purchased a 25% share in the Portuguese transmission company REN. State Grid is also active in Germany: The state-owned enterprise expressed its interest in participating in the tender procedure for the licensing of the Berlin grid.

A team from GvW Graf von Westphalen has been advising State Grid/SMEPC on its activities in Germany and Europe since 2009. In the current transaction GvW advised on the contractual relationships with the consortium company Amperion. The client relationship to State Grid is being overseen by Berlin partner Holger Adam as Client Relationship Manager. Holger Adam: “We are glad to be appointed as a German law firm as the leading adviser in this international project, although there is no relation to German law”.

Advisors SMEPC: Holger Adam (Lead Management, Berlin/Shanghai), Dr Ulrich Schroeder (Lead Management, Berlin) and Henrich Heggemann (Infrastructure Projects, Hamburg); Associates: Horst Hartwig (Energy and Infrastructure, Hamburg), Cuifang Wang (M&A, Hamburg) and Li Li (Shanghai).