More investors for 100 MW solar project in Nigeria

Ugo Okoro, Hajia Sani

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Scatec Solar has signed a Joint Development Agreement (JDA) with Africa50, an African Infrastructure Fund sponsored by the African Development Bank and more than 20 African States as well as Norfund (the Norwegian Investment Fund for Development Countries), securing investment into the 100 MW Nova Scotia Power plant located in Dutse in the Northern Nigerian state of Jigawa.

The project has the potential to significantly contribute to the plan of the authorities of the State of Jigawa to attract $2bn of investments into Jigawa and implement Nigerian President Muhammadu Buhari’s plans to provide jobs and economic opportunities especially for the nation’s youth.

The signing ceremony of the JDA was held in the presence of Børge Brende, the visiting Norwegian Foreign Minister, His Excellency, Barrister Ibrahim Hassan Hadejia, Deputy Governor of Jigawa State, as well as officials from the Nigerian Bulk Electricity Trading among others.

“New local power generation capacity is a key element to attract sizeable investment into the State and region, especially into new industries such as light manufacturing and agricultural processing” said the Deputy Governor, Ibrahim Hassan Hadejia.

“I am pleased that Africa50 is already making its first investment, which fits in squarely with our priority to light up and power Africa,” said Dr. Akinwumi Adesina, President of the African Development Bank (AfDB) and Chairman of Africa50’s Board of Directors.

Africa50 has been created by African governments, including Nigeria, the African Development Bank and institutional investors to mobilize private sector for funding infrastructure projects in Africa.

Alain Ebobisse, Africa50’s CEO noted:“Access to reliable energy is one of the most critical needs in Africa, including in Nigeria, where it is a government priority. I look forward to deepening the relationship with the authorities of Nigeria, one of our key shareholder countries, and to supporting more projects in this and other infrastructure sectors.”

“The formation of this consortium is a strong symbol of the Norwegian and Nigerian commitment to invest in clean energy in Nigeria. With the Government of Norway taking a direct investment role through Norfund, significant regional and Nigerian ownership through Africa50, and the track-record of Scatec Solar, this offers one of the most solid partnerships for solar PV projects globally,” said Executive Vice President Terje Pilskog who signed the JDA on behalf of Scatec Solar.

Apart from the three equity investors, the American Overseas Private Investment Corporation (OPIC), Islamic Development Bank and the African Development Bank are expected to be senior debt providers for the project.

The Nova Scotia solar plant is expected to help Nigeria rapidly increase its generation capacity, provide economic opportunities, fight desertification caused by climate change, and contribute to fulfilling Nigerian President Muhammadu Buhari’s commitments to develop renewable energy as part of the Paris Climate Change Agreement.

In July, the Nova Scotia project signed a 20-year PPA with Nigerian Bulk Electricity Trading (NBET).

Located on 200 hectares of land, the project has strong fundamentals with high solar resources and direct access to the transmission grid through a simple connection route.

The consortium will continue to work with CDIL, a Canadian renewable energy development company focused on Africa, and BPS, a Nigerian strategic consulting, to move the project from “pipeline” and achieve financial close in 2017 and commercial operations in 2018.

Nigeria is Africa’s largest and the world’s 26th biggest economy. With Nigeria’s per capita electricity consumption at 155 kwh, one of the lowest in the world, there is a huge need to increase power production in order to expand and diversify the Nigerian economy.