The following report, written by Joe Brock and Camillus Eboh, was published on October 16, 2012:

ABUJA, Oct 16 (Reuters) - Nigeria announced the preferred bidders on Tuesday for 10 state power distribution firms it is selling for 197.25 billion naira ($1.25 billion) as part of a plan to reform the country's moribund electricity sector.

Power outages, which amount to several hours per day, are the biggest brake on growth in Africa's second biggest economy and a frequent complaint of Nigeria's 160 million people.

In 2010, President Goodluck Jonathan announced plans to break up the state power company and sell it off as 11 distribution and six generation companies. He has promised a tenfold increase in electricity by 2020.

Previous state sell-offs in Nigeria were blighted by political infighting and corruption, which have caused years of delays. Regulators said this process has been more transparent.

"The NCP (National Council on Privatisation) is fairly confident that this process will produce the most appropriate core investors and fulfil the government's objectives of rapid transformation," NCP technical committee chairman Atedo Peterside said at the bid announcement in the capital Abuja.

The distribution firms (DISCOs), which are responsible for delivering electricity to end-users and collecting payment, were sold at a fixed price set by regulators, so bids were ranked on how efficiently the company promised to run the businesses.

Four of the firms - covering Jos, Kano, Port Harcourt and Yola - only had one approved bidder each.

Many of the companies involved in the bids have little or no power sector experience, while others are backed by powerful political interests but have technically capable partners.

Integrated Energy, which is chaired by former military ruler Abdulsalami Abubakar and is partnered by the Philippines' largest power retailer Manila Electric, bid the highest efficiency target for four DISCOs in Yola, Ibadan and the two covering the commercial capital Lagos; Eko and Ikeja.

Chrome Energy, which is chaired by billionaire businessman Emeka Offor, is part of the highest bid for assets in Enugu and Abuja.

Aura Energy, which according to its website was created to buy a coal mine, was the sole bidder for the Jos DISCO and could win by default, while 4Power Consortium, which is made up of several Nigerian companies and an Indian firm, was the only bidder for Port Harcourt, which covers the oil producing region.
Sahelian Energy, a three year old company with no experience of running power assets, was the lead company in the only consortium bidding for the Kano firm.

There were no qualified bids for the Kaduna firm.

Despite holding the world's seventh largest gas reserves, Nigeria only produces a tenth of the amount of electricity as South Africa for a population three times the size. ($1 = 157.2750 naira)