Nigeria inks first ever solar PPA

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What is a PPA? A Power Purchase Agreement (PPA) is a retail energy sales scheme whereby a solar or energy retail company installs solar panels on your roof

Nigeria is in the process of enhancing its support for solar-powered electricity, having signed the nation’s first power purchase agreement.

According to pv-tech, the government-owned energy overseer, the Nigerian Bulk Electricity Trading (NBET), has signed the country’s first-ever solar power purchase agreement (PPA) with more than ten project developers, totaling 975MW of utility-scale solar.

PPA-2“Nigerian Bulk Electricity Trading Plc (NBET) aka the Bulk Trader, is a wholly Federal Government of Nigeria (FGN) owned company incorporated on July 29 2010 as part of President Goodluck Jonathan’s roadmap for Power sector reform towards the full implementation of the Electric Power Sector Reform Act (EPSRA).

“NBET enters into power purchase agreements with generation companies and resells power to distribution companies through the vesting contracts. To fulfill its mandate and drive investment into Nigeria’s power sector, NBET is positioned as a credit-worthy counterparts for current and future generation projects.

“NBET’s as of October 2014 capitalization by the Federal Government of Nigeria in excess of $800 million.”

As of last week, there are presently 15 projects with PPAs. so it is possible that there could still be more in the pipeline. Until this venture, Nigeria has been relatively inactive in its solar energy ventures.

The first official project to be backed under the 20-year PPA is a 75 MW solar plant in Katsina state. It will be developed by European/Nigerian utility-scale investor and developer Pan Africa Solar, in collaboration with JCM Capital, an Ontario-based developer.

The signing of the PPA with the government of Nigeria represents a significant breakthrough for the project, which has been under development since 2011. According to Woodward, the plant will sell power at a fixed rate of US$11.5¢/kWh.Hanwha

JCM Capital’s Justin Woodward has estimated this particular project to be worth US$146 million. The Katsina project will be the largest plant of its kind in Sub-Saharan Africa, excluding South Africa. When operational, it will provide enough clean electricity to power 1.1 million Nigerian homes.

“There is a massive power deficit. Gas is not a solution for the northern part of the country – solar really is the only solution. Additionally, generation in the north will help stabilize the whole grid,” Woodward told pv-tech.

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