There are indications that the fourteen Power Purchase Agreements (PPAs) – commercial terms for power contracts – solar energy developers signed with government owned Nigerian Bulk Electricity Trader (NBET) on July 2016 may take off soon as the investors resume talks with the Federal government.
Babatunde Fashola, minister of power, works and housing , is in talks with the investors to move on-going talks on the solar projects away from the boardroom to the field, a report by Offgrid, Nigeria shows.
Developers of the $2.5bn project who are obligated to handle upfront costs of sizing, procuring and installing the solar PV system now have to contend with rising foreign exchange and inflation which has pushed the cost of solar infrastructure above initial projections.
Sources say a closed-door meeting held between Fashola and CEOs of the firms undertaking the 14 solar power plant was held on recently in Abuja where issues relating to their put call option agreements (PCOA), amongst others were discussed.
The meeting according to the sources, also had the Nigerian Bulk Electricity Trading Plc (NBET) involved.
The NBET in July 2016 signed power purchase agreements with the 14 firms who would invest about $2.5 billion in the construction solar plants that will generate 1125 megawatts (mw) of electricity to the grid.
Recently the NBET distributed the 14 PPAs to the World Bank and Africa Development Bank (AfDB) for implementation, with the World Bank placing some governance related conditions on its work on the PPAs it got, the AfDB however, was undertaking its own without such conditions.
The 14 firms have also been licensed by the Nigerian Electricity Regulatory Commission (NERC) including Pan Africa Solar (75mw solar plant in Katsina State), Nigerian Solar Capital Partners (100mw in Bauchi State) among others.
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