FG revives 14 $2.5bn solar IPPs, extends agreement deadline

There are strong indications that private investors that will construct 14 solar independent power projects (IPPs) across the country at a cost of $2.5 billion will soon make their Final Investment Decisions (FIDs) as the federal government has extended the deadline for the expiration of the investors’ Put Call Option Agreements (PCOAs) till January 2019 to enable the project developers to wrap up their investments plans.

The investors in the 14 solar IPPs signed Power Purchase Agreements (PPAs) with the Nigerian Bulk Electricity Trading Plc (NBET) in July 2016. It was gathered that the investors could not proceed with the projects following concerns raised by the federal government over the high tariffs embedded in the PPAs.

While the project developers were said to have proposed to build the IPPs, which will be located mostly in the northern states, at 11.5 cent per kilowatt hour, the federal government was said to have insisted on $0.075 cent per kilowatt hour (kWh).

It was gathered that following the failure of the investors to adjust to government’s tariff structure, NBET and the Federal Ministry of Power extended the deadline for the long-stop-date for the PCOAs till January 2019 after the initial extension expired in July 2018.
The long-stop-date is the last date by which the PCOAs must be agreed and signed by both parties given that the conditions have been met or the project would be terminated.

Source: THISDAY

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