The federal government is to provide up to $273million worth of Partial Risk Guarantee (PRG) for the 14 new solar power projects for which the signed Power Purchase Agreements (PPAs) were signed recently, the Minister of Power, Works and Housing, Babatunde Fashola has disclosed.
Fashola, according to a statement from the head of press in the ministry of power, Mr. Timothy Oyedeji said the government sourced for this fund to enable the Nigerian Bulk Electricity Trading Plc (NBET) guarantee the PPAs it signed with the firms for the solar projects.
The 14 projects are to be built in different locations which include, Kaduna; Jigawa; Sokoto; Kogi; Enugu; Nasawa; and the federal capital territory Abuja, amongst other locations. They are to collectively add about 1,150 megawatts (MW) of electricity to Nigeria’s grid.
Fashola who was represented by the Minister of State for Power, Works and Housing, Mustapha Baba Shehuri said this when a delegation of the International Monetary Fund (IMF) led by its Chief of Mission in Nigeria, Gene Leone paid him a visit.
He also disclosed that another $200 million financial facility was being negotiated from the African Development Bank (AfDB) for the Transmission Company of Nigeria (TCN) to help in its upgrade plans for the transmission network.
The statement said the minister provided details of what the government was currently doing in the power sector. He said: “We are expecting that at end of the year, our generating capacity will be over 6,000MW by end of 2016, 10,000MW in 2019 and 30,000MW in 2030.”
He noted that bold steps have been taken to harness the solar powered projects, hence the signing of the PPAs with the 14 companies.
The statement added that while he acknowledged the contributions of donor agencies in the power sector, he further stated that, “support in loan agreement in the sum of $273 million has been earmarked for Nigeria Bulk Electricity Trading Company to provide partial risk guarantee for the off-taker and also the $200 million from the African Development Bank for grid upgrade plan is also concluded for the Transmission Company of Nigeria.”
He noted that part of the government’s energy diversification plan was to have a robust mix that will increase the use of coal; hydro; solar; and even more gas to power, bearing in mind that energy in large quantum would be required for individual uses; household access; and indeed spread of electricity access across the country.
Similarly, the statement explained that the Permanent Secretary in the power ministry, Louis Edozien, had in his contribution said the sector’s current challenge was incessant vandalism of the gas infrastructure.
He said this anomaly has resulted to the development of a long-term plan based on the premise of gas supply vulnerability.
He said that a lot of new renewable energy sources would soon come on stream, adding that they include the 40MW Gurara dam in Kaduna State; 40MW Kashimbilla dam in Taraba; 10MW wind farm in Katsina; and 30MW phase one of Kudendan dual fired plant in Kaduna-State.
On the new rural electrification implementation strategy which he noted was before President Muhammadu Buhari, Edozien said the document contains a change in focus from grid expansion to a more decentralised electrification format with emphasis on micro grid fed from off-grid solar and small hydros.