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Off-grid energy company Impala banks on Nigeria’s electricity industry

…stakes $1bn on Sub-Saharan Africa

Factors such as NERC’s inability to consistently execute policies and insolvency of electricity distribution companies have slowed down the transition of Nigeria’s electricity industry into one that is market-driven. But Impala Energy has seen some opportunities in the sector and moved in.

Impala Energy is a power development company focused on small-to-medium sized clean and renewable power projects in Sub-Saharan Africa; including solar, wind, geothermal, hydro and gas and has been doing this for the last 10 years and has installed 50 – 55 megawatts (MW) of electricity across Sub-Saharan Africa countries.

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Nigeria offers vast opportunities for such power projects. The off-grid energy company plans to service big manufacturing companies in the range of Nestle.

According to the African Development Bank (AfDB) Nigeria has the largest off-grid population on the continent with more than 100 million people lacking access to grid electricity. Most are concentrated in the country’s rural regions (where the average electricity access rate is 41.1% compared to the urban rate of 86%, (AfDB).

Mini-grid systems, comprising hybrid or pure solar mini-grids ranging from 50 kW to 1 MW, are deemed a sustainable solution to address rural energy access shortage in communities with productive loads and/or decent spending power.

Last year, the Manufacturers Association, of Nigeria (MAN), said that its members have spent N20.8 billion on alternative power to run production in the past 3 years. The association also said that the manufacturers are constrained by high electricity tariff charged by Electricity Distribution Companies (DisCos).

Backed by Copenhagen-based A. P. Moller Capital that oversees $24.14 billion, Impala Energy is seizing opportunities in the industry segment of the market to finance, operate and maintain independent power plants for eligible customers. Eligible customers in this segment are those that qualify under the Ministerial Directive on Eligible Customers (2017), which outlined four categories of end-users who can buy directly from electricity generation companies (GenCos).

In the second quarter of 2019, A.P. Moller Capital acquired Impala Energy Holdings (“Impala”) which has comprehensive experience and capabilities as well as a strong pipeline of opportunities within captive power projects. Together, Impala and A.P. Moller Capital, through the African Infrastructure Fund, will focus on supplying clean and reliable power in Nigeria.

The firm sees infinite potential in captive power projects in Nigeria and potentially other countries in Africa. A.P. Moller Capital owns 90 percent of Impala Energy Holdings with the remainder owned by Pegasus Capital LLC (who seeded Impala in 2015) and management.

With total installed electricity capacity of 10 MW in Nigeria, the company operates a virtual pipeline, with projects in Lagos, Ondo and Ogun States. It takes companies with a minimum electricity consumption threshold of 2 – 5MW.

“We are technology agnostic. We simply invest in greenfield captive power projects and save manufacturers money in electricity through medium and long-term power purchase agreements,” Chudi Obianwu, vice president A.P. Moller Capital told BusinessDay.

In 2017, Nigerian manufacturers under MAN had considered independent power projects (IPPs) in industrial clusters to enhance sustainable electricity supply. Flour Mills Nigeria Plc, Lafarge Holcim, Tower Aluminium, Cadbury Nigeria Plc and many others depend on independent power plants for energy.

The MAN IPP pilot scheme targeted areas where gas is available like Lagos, Ogun and Rivers states, while solar energy would be deployed in the northern region of the country.




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