Black Rhino, a portfolio company of Blackstone Energy Partners and Dangote Industries, has signed a Power Purchase Agreement (PPA) with the Nigerian Bulk Electricity Trader (NBET) for the Qua Iboe Power Plant (QIPP), a 540 megawatts gas-fired power plant, which will be located in Akwa Ibom State.
The plant is expected to cost $1.1 billion, upon completion. The signing ceremony was presided over in Abuja on Thursday by the minister of power, works and housing, Babatude Fashola, in the presence of the Emir of Kano, Mohammed Sanusi, who is the chairman of the Black Rhino company.
Black Rhino, a portfolio company of Blackstone Energy Partners and affiliated funds managed by Blackstone, and Dangote Industries agreed in 2014 to jointly invest up to $5 billion over the next five years in energy infrastructure projects across sub-Saharan Africa with a particular emphasis on power, transmission and pipeline projects.
Africa has both the lowest urban and rural electrification rates of any continent, and sub-Saharan Africa is home to some 589 million people who do not have access to electricity, approximately 70 percent of the total population.
QIPP is the most advanced project jointly developed by the 50/50 partnership between Black Rhino and Dangote Group in collaboration with the Nigerian National Petroleum Corporation (NNPC).
Speaking on the significance of the pact, the minister said: “This event is not accidental, it is consistent with the clear policy of the federal government clearly enumerated in the Economic Recovery and Growth Plan (ERGP). One of its five principal pillars is production and the supply of sufficient energy and power for Nigeria.
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“We bear the responsibility as a Ministry for the power component while the Ministry of Petroleum resources bears the responsibility for the energy component. Within our responsibility framework, we have set out a roadmap for providing power for this country, which is to start getting incremental energy until we can stabilise and then we can go to uninterrupted power.”
Earlier, the Emir of Kano in his remarks said QIPP would utilise Nigeria’s gas resources to increase electricity generation capacity and reduce the cost of power, saying QIPP was an example of how the Federal Government and private investors could work together to develop infrastructure with a real socio-economic impact for Nigeria.
CEO of Black Rhino Group, Brian Herlihy, said the “project is very advanced from the engineering and environment perspectives. The World Bank has already approved all its requirements and the necessary guarantees, so today was the big milestone we have been waiting for to finalise the agreements with the government.”
He added that work would start at the site in 2018.
Managing director of MBET, Marylin Amobi, told reporters in an interview that serious steps were taken to harmonise the efforts required for the take-off of the project, which she said would immensely benefit the country.
The Dangote Group is one of the most diversified business conglomerates in Africa, with its flagship Dangote Cement Company being the largest listed firm on Nigeria’s stock exchange with a market capitalisation of $10.2 billion.
Blackstone Energy Partners is Blackstone’s energy-focused private equity business. Blackstone has invested approximately $7 billion of equity globally across a broad range of sectors within the energy industry.
INNOCENT ODOH, Abuja
