Documents have emerged which provide further details on why progress has been slow on the consummation of outstanding deals with 14 solar independent power producers (IPPs) who signed power purchase agreements (PPAs) with the Nigerian Bulk Electricity Trading Plc (NBET) and the construction of 14 new solar power plants that could generate 1,125 megawatts (MW) of power to the grid, THISDAY reports.
It was learnt that further developments on them have stalled for reasons relating to opaque procurement of their PPAs, as well as the expensive tariffs approved therein. In the documents from the ministry of finance, the government through the Minister of Finance, Mrs. Kemi Adeosun, had following the signing of the 14 PPAs in July 2016, queried the 11.5 cent per kilowatt hour cost of power approved for the projects, given that the average cost of procuring solar power globally had continued to decline. It also claimed the procurement processes were not clear to it and as such it would hold back approval of Put Call Option Agreements (PCOAs) for them.
The opaque manner in which the 11.5 cent was agreed reportedly also angered the World Bank which quietly informed the finance ministry that they would no longer provide partial risk guarantees (PRGs) for the projects. To this end, it was learnt that two investors – Afrinergia Power Limited and CT Cosmos Limited, have reviewed their rates to 7.5 cents per Kwh and also got Adeosun’s approval of their PCOAs as at December 2017 while the NBET is making efforts to consolidate a position and synergy with finance ministry on the others.