As part of efforts to deliver improved electricity to Nigerians, the Ondo State Government has reached a contractual agreement for the construction of a 1050 Megawatt (Mw) Independent Power Project (IPP) with a South Korea firm, POSCO E&C.
The agreement for an engineering, procurement and construction (EPC) contract for the first phase of the state’s proposed 1050 Mw IPP was recently sealed through partnership with the firm’s Nigerian subsidiary, Kingline Development Company.
The first phase of the project involves the construction of a gas-fired power plant for the generation of 550 Mw which would be sold into the national grid while the second phase of the project is expected to add another 500 Mw to the grid network.
The agreement requires the firm to see to the design, engineering, procurement, construction, commissioning and testing of the 550 Mw open cycle gas turbine power plant to be located in Ondo State. According to the firm, actual construction is expected to commence in the first quarter 2016 and is expected to take about 26 months from commencement and date of issuing the notice to proceed (NTP) for the construction to be completed.
Speaking to journalists in Abuja, the head of Kingline Development in Nigeria, Mr Akinnola Fola, informed that funding had been secured for the project, adding that the EPC contract was recently signed at POSCO E&C’s headquarters in Seoul, South Korea. Giving more insights into the project, Fola explained that a Certificate of Occupancy (CofO) has already been issued for the project by the Ondo State Government even as an Environmental Impact Assessment (EIA) panel review has been done.
He noted that gas supply and transportation arrangement with a major gas supplier and transporter would be concluded this month while Power Purchase Agreement (PPA) finalisation with the Nigeria Bulk Electricity Trading Company (NBET) would also be concluded soon. On approval for evacuation by the Transmission Company of Nigeria (TCN), Fola said that the firm had already secured the approval and added that discussions with multilateral agencies was ongoing.
For his part, the governor of Ondo State, who was represented at the signing ceremony by the senior special assistant on energy/power, Prof Ige Bolodeoku, said that the event marks concrete steps towards the industrialisation of the state.
“This is a major milestone for the state towards alternative revenue generation, especially during this time of dwindling oil revenue,” he said.
He assured the project contractors of the state government’s support, especially in the area of community relations, while imploring the firm to constantly communicate with the state regarding any such issue. Remarking, POSCO’s senior vice president, Energy Division, Woo Dea-Young, noted the teams readiness to deliver on the project in record time, adding that the firm will keep its reputation of timely delivery of project and a friendly relationship with the host community.
Also remarking, the chief executive officer of Kingline Development,Korea, Mr Kim Sean, stated that the firm was looking forward to contributing immensely towards the Nigerian government’s desire of achieving power stability for Nigerians.
Meanwhile, the project owner, Kingline Ondo IPP Ltd, is expected to issue the NTP to POSCO as soon as it is able to conclude all the processes that will lead to the signing of a power purchase agreement with the Nigeria Bulk Electricity Trading Company. The officials expressed optimism that the power purchase agreement will be finalised and executed early in the first quarter of 2016, following which the actual construction will commence.