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The Federal Government recently launched the Nigerian Power Sector Recovery Program: 2017 – 2021, which lays out plans to improve the financial capacity of NBET and improve the viability of the distribution companies in the country

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the Government aims to increase power generation by optimizing operational capacity, encouraging small-scale renewable projects, and building more capacity. Medium term, the Government  aims to optimize the delivery of at least 10,000 MW of operational capacity by 2020 by optimising the existing installed capacity available for generation,addressing gas supply issues including vandalism and completing major gas infrastructure lines for power.

The Power Sector Recovery Program is a series of carefully thought out policy actions, operational,  governance and financial interventions to be implemented by Federal Government of Nigeria ("FGN") over the next five (5) years to restore the financial viability of Nigeria's power sector, improve transparency and service delivery, and  reset  the Nigerian Electricity Supply Industry ("NESI") for future growth.

THE PROCESS FOR UNSOLICITED POWER SUPPLY

STEP 1

The Nigerian Bulk Energy Trader (NBET)provides the creditworthy counterparty to any project developer. The bulk trader is a company wholly owned by the government of the  Federal Republic of Nigeria. As such they lend the project the financial support and the sovereign credit of the Nigerian Government. The NBET payment guarantee is in effect a Nigerian Government guarantee NBET require evidence of compliance in 4 mandatory areas and carry out a  due diligence process in ensuring compliance
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1.Land: NBET request the following documents relating to  land documents:
•Registered title deed to project site land.
•Notarized sale agreement of the project site land.
•Deed of assignment / gift of the project site land.
•Evidence of submission of a title deed to a relevant land processing agency regarding the project site land.
2.ESIA: Complete Environmental Impact Assessment (EIA) has to be completed. NBET will require an EIA for the project that meets the Federal Ministry of Environment

In 2001, the Government of Nigeria in a bid to address the  substantial deficiency in power sector supply, adopted the National Electric Power Policy for the reform of the sector. As a consequence  the Electric Power Sector Reform Act (EPSRA), was passed into law in March 2005. This effectively passed the control of the power sector from the public to the private sector. In furtherance of this goal, the Act saw the creation of the Power Holding Company Nigeria (PHCN) which assumed the assets, liabilities and employees of the erstwhile Nigeria Electricity Power Authority (NEPA); the subsequent unbundling of PHCN into 18 successor companies, the establishment of the Nigerian Electricity Regulatory Commission (NERC); the establishment of the Rural Electrification Agency (REA) and the provision for the establishment of two special purpose vehicles  (SPVs) to undertake electric power trading and management of extant liabilities respectively.

In fulfilment of the requirements of EPSRA, the Nigerian Bulk Electricity Trading Plc, (NBET) aka the Bulk Trader, was incorporated on July 29 2010 as the SPV for carrying out, under license from NERC, the bulk purchase and resale function contemplated by the EPSRA. As such NBET has been set up to “engage in the purchase and resale of electric power and ancillary services from independent power producers and from the successor generation companies”.

Synterra Energy  and their partners are in talks to construct and operate a 90MW  captive  IPP in Edo State. The Group met with the state Governor Godwin Obaseki on a recent trip to Benin City. In a drive to accelerate industrialisation of the state and use efficient and reliable energy to support business in the state, an industrial park has been planned for the area around Geli Geli. The power plant will be located in an area with an abundant supply of gas.

Synterra seek to establish a model that supports financial viability of captive power plants used for the expansion of industrial capacity with the provision of reliable energy to a purpose developed industrial location. In this specific case the project it is contemplated that the project will be supported by a state government guarantee with financing being provided by Synterra and its partners. The electricity generated would be sold on a willing buyer, willing seller basis with a portion possibly going to the national grid.