30 January 2013

Nigeria: Electricity Commission Considers Special Tariff for IPPs

The Nigerian Electricity Regulatory Commission (NERC) is considering developing a special wholesale tariff for an Independent Power Plant, separate from the existing one, chairman of the commission, Dr Sam Amadi hinted recently.

He said the consideration became necessary following a request from an Independent Power Producer (IPP) Azura Powers Ltd. The company is building a 450 megawatts thermal power plant in Edo state.

Amadi gave the hint while addressing newsmen in Abuja on the development of a new self financing metering initiative which seeks to assist electricity consumers who can afford it get metered faster.

He however said the request from Azura would be subjected to public hearing/debate before a final decision would be taken given that the tariff they are asking for is bigger than what NERC has published.

The NERC boss said "The commission considered the request by the Nigerian Bulk Electricity Trading Company to allow Azura Power to have a special tariff because of the cost of gas to them.

Azura power is a 450MW power plant in Edo state, it is in partnership with the government of the state and some foreign financial partners, they have done a lot of work such that they are moving very fast and want to sign a power purchase agreement with the bulk trader."

He further explained that "the MYTO has given a wholesale price of electricity from gas-fired plant which means that the power purchase agreement should reflect what you are selling but if there is need for special tariff, the process requires that we see your books, look at your gas and other operational costs to ascertain that they are prudent before passing them to consumers."

The 450MW Azura-Edo IPP is an Open Cycle Gas Turbine (OCGT) power station and an early project to be initiated by Azura Power in its 1000MW IPP facility being developed near Benin City.

It has completed its equity financing framework and shortlisted for World Bank Partial Risk Guarantee (PRG) series for funding support.

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