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Power Sector Opportunities in Nigeria

UKTI TRADE DELEGATION TO LONDON – SESSION WITH BRITISH EXPERTISE AND THE CITY UK 11 th FEBRUARY, 2013. Power Sector Opportunities in Nigeria . Dolapo Kukoyi, Partner (Power). 0. Outline. Brief History of the Nigerian Power Sector Nigerian Power Sector Outlook

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Power Sector Opportunities in Nigeria

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  1. UKTI TRADE DELEGATION TO LONDON – SESSION WITH BRITISH EXPERTISE AND THE CITY UK 11th FEBRUARY, 2013 Power Sector Opportunities in Nigeria Dolapo Kukoyi, Partner (Power) 0

  2. Outline • Brief History of the Nigerian Power Sector • Nigerian Power Sector Outlook • 3. Power Sector Opportunities • Legal, Regulatory and Contractual Framework

  3. Brief History of the Nigerian Power Sector

  4. Brief History of the Power Sector • A monopoly run by a single government owned utility company • handling generation, transmission and distribution of Electricity. • Single Utility Company progressively incapable of handling power • demands with rising population. • By 1999, NEPA at the time had an imminent complete system • failure • Power Sector Reforms in 2005; creation of PHCN, unbundling of • Generation, Distribution and Transmission businesses and creation • of successor companies and regulatory framework • Privatization Process suspended in 2007 restarted in August 2010

  5. Nigerian Power Sector Outlook

  6. SOKOTO ZAMFARA JIGAWA YOBE KASTINA BORNO KEBBI Gombe Niger BAUCHI KADUNA Plateau ADAMAWA KWARA ABUJA NASARAWA Kogi OYO TARABA EKITI ,bDKDKO Ogun Power Generation Legend OSUN BENUE Ondo Edo FGN Gencos Enugu Non Operating IPPs FGN NON OPERATING GENCOS Lagos Cross River Operating IPPs Abia Delta Operating NIPPs Imo Non Operating NIPPs Rivers Bayelsa Akwa-Ibom EMBEDDED GENERATION

  7. FUEL SOURCES SOKOTO JIGAWA ZAMFARA YOBE KASTINA BORNO KEBBI GOMBE BAUCHI KADUNA NIGER Plateau ADAMAWA KWARA ABUJA NASARAWA OYO TARABA KOGI EKITI OSUN BENUE OGUN Alternative Fuel Sources Legend ,bD K00 ONDO EDO Coal Deposits ENUGU LAGOS Hydro Projects ANAM- BRA Colours: ABIA Coal CROSS RIVER IMO DELTA Water Gas RIVERS AKWA IBOM BAYELSA

  8. Nigerian Power Sector Outlook – National • Power Sector Road Map aspiration – 40,000 MW by 2020 • Presidential Taskforce on Power – 30,669 MW by 2020 • Daily Peak Delivery as at December 2012 – 4300 MW ( ± ), • 32 Licensed On -Grid IPPs with a total installed capacity of ±1879 MW total • licensed capacity 12,324 MW • 21 Licensed Off – Grid IPPs with a total installed capacity of ±111.15 MW; • total licensed capacity 284.5 MW • 3 EG Licenses with a total licensed capacity of 263 MW – All Non-Operational • 4 NIPP Projects currently operative with a total installed capacity of 5,625MW, • Generating Capacity of 4 NIPPs 1,687.5 MW – Dec 2012; • 7 FGN Successor Generation Companies (Hydro and Thermal Stations) with a total • installed capacity of 5,980 MW • 3 big Hydro projects (Gurara, Zungeru and Mambilla) at different stages of • development proposed capacity of 3,300 MW

  9. Nigerian Power Sector Outlook – Hurdles • Access to gas, gas prices and gas supply framework • Transmission Network – Losses and dilapidated Infrastructure • Bulk Trader – Credibility , Standard PPA Template • Cost Reflective Tariff • Maintenance/ Turnaround of existing FGN Discos • Funding for NIPP Projects • Liquidity and Regulatory Risks -World Bank Partial Risk Guarantee • Financing for IPPs

  10. Power Sector Opportunities

  11. Power Sector Opportunities • Investing in Power Privatization (Commercial, Technical and Financial) • Power Transmission Infrastructure • Gas Transportation Infrastructure • Technology and Engineering • Independent Power Projects (on grid and off grid) • Embedded Generation • Independent Electricity Distribution Networks • Technical capacity and Knowledge – capacity, standards, contracts.

  12. Power Sector Opportunities – Lagos State • Population as at 2012 – 20.5 million • 2,000 industrial complexes, 10,000 commercial ventures and 22 • industrial estates. • Requires over 12,000 MW of electricity

  13. Power Sector Opportunities - Lagos State Source: Presentation on Power Sector Development: Lagos State Economic Summit April 23-25 2012

  14. Legal, Contractual & Regulatory Structure

  15. Level 1 Ministry Of Power Energy Commission of Nigeria Nigeria Electricity Reg Commission Min of Water Resources National Inland Waterways POLICY & REGULATIONS Level 2 Gas Aggregation Co of Nigeria Nigerian Bulk Electricity Trading Plc Niger Delta Power Holding Co Transmission Co of Nigeria Nigerian Elect Liability Mgt Co GOVERNMENT ENABLERS IOCS GTC NGC M.O S.O TSP Level 3 Independent Power Producers Successor Generation Companies NationalIntegrated Power Projects Successor Distribution Companies Independent Elect Dist. Networks INDUSTRY PARTICIPANTS Off Grid On Grid Embedded FGN Plants

  16. Notable Milestones • Enabling Legislation for Power Sector Reforms • Independent Regulator – NERC • Licensing Framework • Tariff Framework – MYTO I & II • Robust Regulatory Framework – Regulations and Codes • Bulk Trader set up and funding in progress • Contractual Framework in progress • Gas Contractual Framework in progress

  17. Conclusion • The Nigerian Power Sector is bursting with opportunity • Challenges exist but can be overcome • Consistent Government political will is evident in the current privatisation process

  18. BREAKING NEWS!!!!!

  19. Thank You for Listening

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