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The move towards diversifying Nigeria’s energy generation sources has been given a significant lift with the signing of the country’s first Power Purchase Agreement (PPA). The Nigerian Bulk Electricity Trading (NBET), which supervises energy-related matters on behalf of the Nigerian government, reached the agreement with a number of project developers for 975 MW of utility scale solar.

Reports indicate that among the projects to be executed under this agreement is a solar plant to be located in Katsina State. The 75MW plant will be developed by Pan African Solar, a utility-scale investor, in partnership with the Canadian private equity firm, JCM Capital. The plant is expected to supply power to homes in northern Nigeria at a fixed rate of $11.5c/KWh. This appears to be connected to the 1,000 MW of solar power which Pan Africa’s CEO, Marcus Heal, had said his company plans to bring on stream in Nigeria .

 Justin Woodward, Chief Development Officer for JCM Capital, anticipates that financial transactions relating to the project will be completed in the first quarter of 2017. According to him, the project is worth $146 million.

“There is a massive power deficit. Gas is not a solution for the northern part of the country- solar really is the only solution”, Mr Woodward said. He added that generation in the north will help stabilize Nigeria’s power grid, as it would relieve the burden brought on it by demand from a rapidly increasing population.

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This article was first published on 14th July 2016

ikenna-nwachukwu

Ikenna Nwachukwu holds a bachelor's degree in Economics from the University of Nigeria, Nsukka. He loves to look at the world through multiple lenses- economic, political, religious and philosophical- and to write about what he observes in a witty, yet reflective style.

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