Business
Power Plant: Firms Sign $1.1bn PP Agreement
The Qua Iboe Power Plant Ltd (QIPP) and the Nigerian Bulk Electricity Trading Plc (NBET) yesterday signed a Power Purchase Agreement (PPA) to construct a 540 Mega Watts gas-fired power plant in the country.
The plant, expected to be located in the Akwa Ibom, is expected to cost 1.1 billion dollars.
The QIPP, NBET, Nigerian National Petroleum Corporation (NNPC), Ministry of Finance, had agreed to a Put and Call Option Agreement (PCOA).
The PCOA details Federal Government’s obligations in supporting the QIPP’s PPA.
QIPP is jointly developed by the Africa Energy Infrastructure Company, Black Rhino, Dangote Group and the NNPC, following the purchase of the rights to develop the project from the Mobil Producing Nigeria.(MPN)
QIPP will be one of the lowest cost power thermal power plants in Nigeria because of its efficient combined cycle design and competitive gas price, giving its 20 –year gas sales agreement with MPN.
The power plant, which is expected to add additional power to the grid on completion, is also expected to unlock investments in transmission infrastructure, including a 58 kilometre transmission line to be built by QIPP.
The Chairman of Black Rhino and Emir of Kano, Muhammadu Sanusi the second, said QIPP would utilise Nigeria’s gas resources to increase electricity generation capacity to reduce cost of power.
He said that the agreement was the beginning of financing in the nation’s power sector.
“Hopefully within the next few months, we will be able to get the financial close which will bring in 1.2 billion dollars into this project.
“We hope with Dangote Group and other partners, this is just the beginning of financing in the power sector, after this we have the Kano solar plants.”
Sanusi said QIPP was an example of how Federal Government and private investors could work together to develop infrastructure that had real socio- economic impact on the country.
The Chief Executive Officer of Dangote Group, Alhaji Aliko Dangote, said that Black Rhino Group and Dangote group partnership was designed to close the gap between Nigeria generation capacity and the energy required to underpin economic growth in the country.
The Chief Executive Officer of Black Rhino, Mr Brian Herlihy, said the QIPP would catalyse further infrastructure investment in Nigeria and support government in building a sustainable power sector for Nigerians.
The Minster of Power, Works and Housing, Mr Babatunde Fashola, said that the 540MW PPA was consistent with clear policy of government as indicated in the Economic Growth and Recovery Plan (EGRP).
Fashola said one of the pillars of EGRP was the production and supply of sufficient power to Nigerians.
He says the process that potentially adds 540mega watts of electricity to the nation’s power store, fits into the incremental power programme of government.
He said the ministry had begun a review of the preparation of construction of the Ikot Ekpene line, adding the QIPP would utilise the line on completion.
“We held long meetings with Niger Delta Power Holding Company of Nigeria (NDPHC) and we must acknowledge their commitment that they will deliver.
He urged all partners in the project to actively get involved in it to deliver the project in good time.
Earlier, the Managing Director of NBET, Dr Marilyn Amobi, said that the project had started as an alliance between NNPC and its joint venture partners.
She said that the project was the response to government’s call to investors to contribute to the investment in the Nigerian electricity supply industry.
Some Commercial drivers in Port Harcourt have said that the Federal Government’s N1,350 fuel discount is yet to reduce their daily operating cost.
A cross session of commercial drivers who spoke to The Tide correspondents in Port Harcourt said they are yet to feel the impact of the government discount, adding that most filling stations in the city are even selling above the pump price
A driver Jude Ogbo who operates the mile 1 Rumuokoro axis of Port Harcourt said plies the discount has not reflected in his daily fuel expenses.
“Since the discount was announced, many filling stations still sell at the old price. When you go there, you discover they sell you two litres at the price of one. For now, we have not seen any reduction,”_ he said.
Another commercial driver, Comrade Ishmael Uzeho who operates within the Port Harcourt metropolis, said the discount is not being implemented across the country.
“How has the discount affected us? I will say it has not. Many stations are not working. Only NNPC is working and that is just one person in the whole country. If government really wants to help, let the fuel price go down properly,”_ he said.
Uzeho added that if the price of fuel goes down, transport fares will also go down. He noted that his route fare has remained at N500.
On his part, Mr. Moses Dapa, Supervisor at Sam Jaja Foundation Transport Company, said the company has not increased its fares despite the high cost of fuel.
“We are still running normal price. We charge N2,000 and N5,000 depending on the destination. We will not increase our price. I don’t know about other parks, but for Sam Jaja, we are maintaining normal price,”_ Dapa said.
He appealed to passengers to understand that drivers are not using high fuel price as an excuse to charge excessive fares.
Other drivers who spoke said the federal government should monitor the NNPCL retail stations to ensure that the directive is implemented.
Recalled that The Federal Government in abid to reduce transportation cost in the country had announced a 30-day margin discount at NNPC Retail stations across the country from October 1 to 31,
However investigation revealed that the policy is yet to affect transportation cost in the country.
By; Stephens Sopakriba and Saint Davies
In a press statement released to The Tide’s source on Friday in Abuja, the group said Nigeria had a significant resource advantage due to its vast natural gas reserves.
“At a time when global energy markets face unprecedented volatility and rising operational costs, Nigeria stands on a massive resource advantage with its vast natural gas reserves,” the group said.
Highlighting this potential, Alfa Designs urged the nation to move past complaints over energy costs and aggressively embrace Compressed Natural Gas (CNG) as a sustainable engine for economic growth.
While federal policy adjustments have sought to cushion the impact of global energy shocks, industry experts emphasised that long-term relief hinges on a rapid, nationwide transition to gas.
“Transitioning away from expensive traditional petroleum products promises to ease the financial burden on ordinary citizens.
“It will also reposition Nigeria as an attractive industrial hub capable of drawing foreign direct investment and driving job creation,” it said.
To demonstrate the practical feasibility of this transition, the group said it recently partnered with a global Original Equipment Manufacturer (OEM) to lower the entry barriers for commercial drivers.
“By negotiating directly with the manufacturer, we reduced the total cost of acquiring and installing a CNG conversion kit for commercial tricycles (commonly known as Keke NAPEP) from up to N700,000 down to under N450,000.”
The group said this shift offers dramatic immediate financial benefits for local operators, with petrol currently selling at roughly N1,390 per liter.
It said that, in comparison, at a CNG equivalent price of about N98 per liter, a daily commercial driver using 10 liters of fuel reduces its daily energy expenditure from N13,900 to N3,980.
“This represents a daily net savings of N9,920, or more than 71 per cent.
“Over a standard 26-day working month, drivers save over N257,000, allowing them to fully recover the cost of the CNG conversion in less than 46 operational days.”
The company further stated that when scaled nationally, the economic implications are monumental.
“Nigeria consumes approximately 50 million liters of gasoline daily, costing roughly N69.5 billion per day.
“A nationwide 71 per cent reduction in fuel expenditure would generate daily national energy savings of N49.6 billion.
“On an annualised basis, this shift equates to approximately N18.1 trillion, or $13.5 billion, kept within the domestic economy.”
The group added that those recurring national savings would offer a vital mechanism to help address Nigeria’s estimated $2.3 trillion infrastructure deficit.
It said reinvesting those funds into the economy helps eliminate the 30 to 40 per cent operational overhead currently consumed by imported fossil fuels.
“The resulting boost to corporate margins expands the national tax base, generates reliable user-fee revenues to make major transit projects bankable, and creates a self-sustaining financial cycle,” it said.
