14 solar IPPs, FG set to rekindle negotiations with investors

Nigeria plans to rekindle negotiations on Put Call Option Agreement (PCOA) with 14 pioneer utility scale solar plants expected to generate more than 1000 megawatts (MW) of solar-based electricity when constructed.

Sources say this decision is informed by pressures mounted by governors in the states where the plants would be built. To this end, a meeting has been arranged between investors in the projects and relevant government representatives which include Louis Edozien, the permanent secretary in the ministry of power, as well as the Nigerian Bulk Electricity Trading Plc (NBET).

The project ran into troubled waters on account of foreign exchange difficulties and inflation that ruined the project forecasts. The  Nigerian Bulk Electricity Trader, who are offtakers according to the terms of the Power Purchase Agreements (PPAs),  extended the execution window for the PPAs of the projects by six months to enable their promoters meet up with the condition precedents in their PPAs.

Sources in the NBET, informed Offgrid Nigeria that an extension which would take up to January 2018, was granted the promoters to enable them conclude their conditions precedents, after which the NBET would sign off on them.

The PPAs were randomly distributed to the AfDB and World Bank by the government, and both development finance institutions have reportedly being working on closing them out to enable promoters achieve financial close for the projects.

Collectively, the 14 projects would when completed, generate 1125MW of solar electricity to augment Nigeria’s electricity generation capacity. They will cost the promoters $2.5 billion. When completed, the solar projects would with their capacities, buttress Nigeria’s plan to diversify its energy mix.

ISAAC ANYAOGU