Four investors line up for Cegco sell-off

14 July 2006
The Executive Privatisation Commission (EPC) is in talks with four financial investors over the sale of a 51 per cent stake in Central Electricity Generating Company (Cegco). Prospective investors include Amman-based JD Capital, Kuwait's Kharafi National, Dubai-based Abraaj Capital and an unidentified company from Malaysia. Officials at the EPC expect to make an award by August (MEED 31:3:06).

The current negotiations mark a departure for EPC. 'Over most of the past decade we have negotiated with strategic partners,' Mohammed Abu Hammour, chairman of the EPC, told MEED in early July. 'We spent a year and a half negotiating the Cegco stake now the strategy is to include many financial investors and not just strategic partners.'

According to Abu Hammour, the value of the Cegco sale is estimated at $120 million. Negotiations between the Energy & Mineral Resources Ministry and India's Reliance Energy broke down earlier this year, delaying the government's plans for the energy sector.

The Cegco sale had been expected to be completed during 2005 and was to be followed by the sale of a 100 per cent stake in Electricity Distribution Company and a 55.4 per cent stake in Irbid District Electricity Company.

Amman has to develop new generating capacity to meet demand growth and replace old generating assets as they are decommissioned. Rothschild and Germany's Fichtner are advising the government on its power privatisation programme.

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