Power Plant
Managing Director of Azura Power West Africa Limited, Dr. David Ladipo whose company recently signed the pioneer Power Purchase Agreement (PPA) with the Nigeria Bulk Electricity Trading Company (NBET), spoke with Chineme Okafor on the import of the PPA and other vital issues on private project financing mechanisms for the power industry.
Could you precisely tell me the long-term significance of the PPA you signed with the electricity “bulk trader” on the emerging power market?
It means a tremendous amount. We are investing close to $700 million in building a 450 megawatts (MW) power plant in Edo State and we have been developing the project for several years now; it is a project-financed investment.
What that means is that it is very different to the way that people have typically invested in the power sector in Nigeria before, which was typically the government saying to people that we want you to come in and build and we will finance you to build the plant.
In our case, by contrast, we are saying that we will raise all the money, we will spend it on building the plant and once we have built it, we want the assurance that we have an off-taker - someone who will take that power off from us and pay us for that.
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