NERC Considers IPP’s Request for Special Power Trade Tariff

The Nigerian Electricity Regulatory Commission (NERC) has said it was considering a request for special power trade tariff made by an Independent Power Producer (IPP) Azura Powers for sale of electricity generated from its 450 megawatts (MW) thermal plant located in Edo state.

Chairman of NERC, Dr. Sam Amadi, stated at a media briefing in Abuja that although the commission was considering the request by the IPP, it would however not engage in hasty decisions that could hurt operation in Nigeria’s emerging power sector.

Amadi disclosed that the request would be open for extensive discussion by stakeholders in the sector, adding that such request was peculiar in a sector that is undergoing a transitional phase in market rules and operations.

The 450MW Azura-Edo IPP is an Open Cycle Gas Turbine (OCGT) power station and an early project to be initiated by Azura Power in its 1000MW IPP facility being developed near Benin City.

The plant is sited on a 100 hectare, large enough to accommodate future expansion of the power plant. In line with extant regulations in the sector, the project has achieved certain key milestones that include acquisition of an IPP operational licence, Certificate of Occupancy (C of O), signing of a project implementation agreement with Edo state government, completion of an environmental and social impact assessment and resettlement action plan up to World Bank standards and grant of transmission connection.

It has also completed its equity financing framework and shortlisted for World Bank Partial Risk Guarantee (PRG) series for funding support. Accordingly, it is in its final rounds of negotiations on Power Purchase Agreement (PPA) with the bulk trader as well as negotiations on Gas Purchase and Transportation Agreements. Azura expects to reach financial closure soon and begin construction in 2013.

Lagos to generate 3000 Megawatts in 2 years

The Lagos State Government has unveiled its plan to achieve 3,000 megawatts of power generation, which it said, would be realized through its independent power projects (IPPs) before the end of the 2014 fiscal year.

Commissioner for Energy and Mineral Resources, Mr. Taofiq Tijani, said this at a recent event in Lagos. Tijani said the state government was hopeful that not less than 3,000 megawatts of electricity “will be generated in the next two years. With these and other IPPs still expected to come on stream before the end of the Babatunde Fashola led administration in 2015”.

The IPPs include the Akute Power Plant (12.15MW) at the Akute/Adiyan Waterworks in partnership with Oando Plc and Lagos Island Power Plant (270 MW) in collaboration with AES Nigeria, a subsidiary of AES USA. The Akute IPP is dedicated to powering the Akute Waterworks, one of the biggest sources of water supply to Lagos, while the Island IPP powers street lights and selected public institutions around the CMS area.

Privatization: N330bn needed to offset PHCN creditors

A whopping N330 billion is needed to offset to the Power Holding Company of Nigeria, PHCN, creditors before privatization can take place. This was revealed by the Managing Director of the Nigeria Electricity Liability Management Ltd, NELMCO, Dr Sam Agbogun.

Agbogun said the company needed more than N330 billion to settle creditors of PHCN before a smooth and full privatization could take place. According to him, “majority of the debts owed by PHCN are with the Independent Power Producers, IPPs, who are generating power now and PHCN cannot pay them because of the low tariff it is charging. So, everyday as power is being consumed, we owe the power producers more”.

He also pointed out that some power stations, such as Kainji and Jebba were built with foreign loans, noting that the loans had not been fully paid, hence NELMCO would allow DMO to clear up such debts. He listed the debts/liabilities owed by PHCN to include PHCN’s pensioners, IPPs, financial institutions and other creditors, foreign and local, who had supplied PHCN with materials or services for their functions but are yet to be paid.