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Investing in Power: Nigeria’s strategy towards an efficient power sector

Nigeria International Investment Forum, Lagos, Nigeria. Investing in Power: Nigeria’s strategy towards an efficient power sector. Arif Mohiuddin VP (West Africa) 4th October 2012. Agenda. Major Steps to Date Major Risks and Mitigation Strategies. Major Steps to Date.

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Investing in Power: Nigeria’s strategy towards an efficient power sector

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  1. Nigeria International Investment Forum, Lagos, Nigeria Investing in Power: Nigeria’s strategy towards an efficient power sector Arif Mohiuddin VP (West Africa) 4th October 2012

  2. Agenda • Major Steps to Date • Major Risks and Mitigation Strategies

  3. Major Steps to Date • Enactment of EPSR Act 2005 • Transformation of NEPA to PHCN • Establishment of Nigeria Electricity Regulatory Commission (NERC) • Unbundling of PHCN into 6 generation companies, 1 transmission company and 11 distribution companies • Investment in 10 generation plants (4,806 MW) and related gas, transmission and distribution assets through NDPHC • Establishment of Nigeria Bulk Electricity Trading Company (NBET) • Engagement of Management Contractor for Transmission Company of Nigeria (TCN)

  4. Major Steps to Date • Significant Progress in Privatisation • Preferred bidders in place for 5 generation companies (subject to NCP Approval) • Commercial bid opening for distribution companies 16th of Oct. • Finalization of transaction agreements before year end • Handover mid next year

  5. Major Risks

  6. Mitigation Strategies • Fuel – Allocation of risks across GSA, GTA and PPA • Operations – Experienced operator • Disputes – Discretion of bidders to decide on the venue of arbitration • Payment Obligations – Partial Risk Guarantee • Regulatory Risk – Independent Regulator, Possible PRG on MYTO risks • Construction – Experience in managing EPC contracts

  7. Mitigation Strategies • Inefficient management in the value chain – Engagement of Management Contractor for TCN • Maintenance –performance agreements • Payment, Collection – Primarily Operators’ risks but provision to receive payments directly from Ministry of Finance for FGN selected entities

  8. Thank you www.cpcstrans.com

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