ABA CLEAN ENERGY CARBON PROJECT Bruce Johnston FIRST IPP IN NIGERIA ABA CLEAN ENERGY CARBON PROJECT Bruce Johnston

Aba

Genesis of Aba IPP December 2000 – Geometric Power Limited (GPL) (sponsor and developer of Aba IPP Project) launches the Abuja 22MW Emergency Power Plant March 2004 – President Obasanjo approves GPL’s Aba IPP as first privately financed project May 2004 – Minister of Power and Steel, MD/CEO of NEPA and GPL sign an MOU to build the Aba IPP according to the President’s directive April 2005 – Minister of Power and Steel, MD/CEO of NEPA and APL sign an agreement for the lease of NEPA assets in Aba by APL for 15 years August 2005 – President allocates supply of gas for the Aba IPP in the National Gas Master Plan

Project Background Current situation – Industries and other consumers presently depend on expensive diesel generation for a substantial part of their production because of inadequacy of the power supply from the national grid Aba IPP Project – Will supply reliable power to industries, commercial businesses and residential homes in Aba through construction and operation of 140 MW gas fired power plant Downstream – Construction of own industry-centred distribution lines: several industries poised to expand production capacity if reliable low-cost power supply is assured Other Customers – Commercial and residential consumers to receive power through distribution lines in “ring-fenced” network leased from PHCN

Project Description Structure Island model disconnected from the national grid and serving industrial and residential customers Power Station Installed capacity of approximately 140 MW comprising 3 gas fired open cycle turbines with opportunity for expansion EPC Contractor to construct, install and commission power plant on turnkey basis Subsequent procurement of O&M Contract Distribution Lines 33 KV distribution lines to be constructed from power station to supply reliable power to GPAL Customers through seven distribution substations

Project Description (Cont.) Substations 33 KV Power Station substation with eight outgoing 33 KV Feeders to be constructed for evacuation of power generated at the Power Station New Distribution Substations Four distribution substations to be constructed within the city of Aba and equipped each with 2x15 MVA 33/11 KV transformers to supply power to GPAL customers Osisioma Ogbor Hill Factory Road Port Harcourt Road

Project Description (Cont.) Leased Distribution Substations Three distribution substations (each equipped with 2x15 MVA 33/11 KV transformers) leased from NEPA to supply power to residential and commercial customers through APL NEPA Aba Control Substation NEPA Power Station Substation NEPA Umuode Substation

The Clean Energy Project Nigeria's first Clean Energy Carbon Project to benefit from the Clean Development Mechanism ("CDM") established under the Kyoto Protocol. Project has qualified for $9 million carbon grant from the Community Development Carbon Fund (CDCF) (set up by the World Bank).

Carbon Finance General term applied to financing under which a Fund/entity seeks to purchase greenhouse gas emission reductions ("carbon" for short) to offset emissions in the OECD. Under Carbon Finance arrangements (or ERPA) a clean development project in a developing country can "sell" carbon credits, obtained by replacing more polluting projects, to buyers in industrialised countries seeking to meet their Kyoto obligations to reduce emissions in those countries.

Community Development Carbon Fund A public-private partnership of governments and 16 companies and organisations managed by the World Bank. Designed to provide communities in developing countries, and in particular least developed countries, with an opportunity to benefit from new investments in renewable energy and clean technologies that aim to reduce greenhouse emissions and mitigate effects of climate change, while improving the welfare of the communities involved. Community development benefits of ABA Project include access to electricity, construction of a school, health centre and a road for the surrounding communities of Aba Plant.

ABA IPP Investment Structure CDCF Carbon Funding

ABA IPP Power Delivery Model Gas Supplier Gas Transporter

Allocation of Power Plant Capacity Unregulated Customers At least 60% to industries directly via new GPAL owned distribution lines and substations Regulated Customers Up to 40% to residential and commercial customers via APL leased PHCN distribution lines and substations

Power Purchase Agreements Unregulated Supply Each industry off-taker will sign PPA with GPAL Each industry off-taker will provide payment security in the form of revolving bank guarantee Industry off-takers will pre-pay for one month supply Tariffs Regulated Supply Each customer will sign a Standard Connection Agreement (with APL) Customers will use pre-pay meters

Gas Supply Requirement Plant requires ~43 mmscf/day Supply Primary fuel is natural gas supplied through a pipeline from Imo River and the gas gathering field in Owaza and Obigbo GPAL will sign a GSA with Gas Supplier Transportation To be transported through a new pipeline constructed by separately procured gas transporter GPAL will sign a Gas Transportation Agreement with Gas Transporter

ABA CLEAN ENERGY CARBON PROJECT Bruce Johnston FIRST IPP IN NIGERIA ABA CLEAN ENERGY CARBON PROJECT Bruce Johnston