0 Power Sector Opportunities in Nigeria Dolapo Kukoyi, Partner (Power) UKTI TRADE DELEGATION TO LONDON – SESSION WITH BRITISH EXPERTISE AND THE CITY UK 11 th FEBRUARY, 2013

1 1.Brief History of the Nigerian Power Sector 2.Nigerian Power Sector Outlook 3. Power Sector Opportunities 4.Legal, Regulatory and Contractual Framework Outline

2 Brief History of the Nigerian Power Sector

3  A monopoly run by a single government owned utility company handling generation, transmission and distribution of Electricity.  Single Utility Company progressively incapable of handling power demands with rising population.  By 1999, NEPA at the time had an imminent complete system failure  Power Sector Reforms in 2005; creation of PHCN, unbundling of Generation, Distribution and Transmission businesses and creation of successor companies and regulatory framework  Privatization Process suspended in 2007 restarted in August 2010 Brief History of the Power Sector

4 Nigerian Power Sector Outlook

Gombe Kogi Plateau Abia Akwa- Ibom Ondo Ogun Lagos Edo Delta Bayelsa Rivers Cross River,bDKDKO Power Generation Legend FGN Gencos Non Operating IPPs Enugu Niger Operating NIPPs Imo Non Operating NIPPs TARABA Operating IPPs FGN NON OPERATING GENCOS EMBEDDED GENERATION KADUNA BORNO YOBEJIGAWA KASTINA ZAMFARA SOKOTO KEBBI KWARA OYO OSUN EKITI ABUJA NASARAWA BAUCHI ADAMAWA BENUE 5

FUEL SOURCES SOKOTO ZAMFARA KASTINA JIGAWA YOBE BORNO KEBBI NIGER KADUNA BAUCHI GOMBE Plateau ADAMAWA KWARA ABUJA NASARAWA TARABA BENUE KOGI OYO OSUN EKITI ONDO OGUN LAGOS EDO DELTA ENUGU CROSS RIVER IMO ABIA BAYELSA RIVERS AKWA IBOM ANAM- BRA,bD K00,bD K00 Alternative Fuel Sources Legend Coal Deposits Hydro Projects Colours: Water Coal Gas

7 Nigerian Power Sector Outlook – National  Power Sector Road Map aspiration – 40,000 MW by 2020  Presidential Taskforce on Power – 30,669 MW by 2020  Daily Peak Delivery as at December 2012 – 4300 MW ( ± ),  32 Licensed On -Grid IPPs with a total installed capacity of ±1879 MW total licensed capacity 12,324 MW  21 Licensed Off – Grid IPPs with a total installed capacity of ± MW; total licensed capacity MW  3 EG Licenses with a total licensed capacity of 263 MW – All Non-Operational  4 NIPP Projects currently operative with a total installed capacity of 5,625MW,  Generating Capacity of 4 NIPPs 1,687.5 MW – Dec 2012;  7 FGN Successor Generation Companies (Hydro and Thermal Stations) with a total installed capacity of 5,980 MW  3 big Hydro projects (Gurara, Zungeru and Mambilla) at different stages of development proposed capacity of 3,300 MW

8 Nigerian Power Sector Outlook – Hurdles  Access to gas, gas prices and gas supply framework  Transmission Network – Losses and dilapidated Infrastructure  Bulk Trader – Credibility, Standard PPA Template  Cost Reflective Tariff  Maintenance/ Turnaround of existing FGN Discos  Funding for NIPP Projects  Liquidity and Regulatory Risks -World Bank Partial Risk Guarantee  Financing for IPPs

9 Power Sector Opportunities

10 Power Sector Opportunities  Investing in Power Privatization (Commercial, Technical and Financial)  Power Transmission Infrastructure  Gas Transportation Infrastructure  Technology and Engineering  Independent Power Projects (on grid and off grid)  Embedded Generation  Independent Electricity Distribution Networks  Technical capacity and Knowledge – capacity, standards, contracts.

11 Power Sector Opportunities – Lagos State  Population as at 2012 – 20.5 million  2,000 industrial complexes, 10,000 commercial ventures and 22 industrial estates.  Requires over 12,000 MW of electricity

12 Power Sector Opportunities - Lagos State NoAreaNo. of Location s No. of SectorsInstalled Capacity (MW) Number of Generators 1Somolu Printing Community Matori Industrial Estate Ilupeju Industrial Estate Ikorodu Industrial Estate Lagos Island (broad street & Marina only) Ikeja GRA Oba Akran Agindingbi Omole Omole Dolphin Estate Source: Presentation on Power Sector Development: Lagos State Economic Summit April

13 Legal, Contractual & Regulatory Structure

Ministry Of Power Ministry Of Power Energy Commission of Nigeria Nigeria Electricity Reg Commission Min of Water Resources National Inland Waterways Gas Aggregation Co of Nigeria Nigerian Bulk Electricity Trading Plc Nigerian Elect Liability Mgt Co Niger Delta Power Holding Co Independent Power Producers Successor Generation Companies National Integrated Power Projects Successor Distribution Companies Successor Distribution Companies Independent Elect Dist. Networks Off Grid On Grid Embedded FGN Plants NGC GTC IOCS GOVERNMENT ENABLERS POLICY & REGULATIONS INDUSTRY PARTICIPANTS Level 1 Level 2 Level 3 Transmission Co of Nigeria M.O S.O TSP

15  Enabling Legislation for Power Sector Reforms  Independent Regulator – NERC  Licensing Framework  Tariff Framework – MYTO I & II  Robust Regulatory Framework – Regulations and Codes  Bulk Trader set up and funding in progress  Contractual Framework in progress  Gas Contractual Framework in progress Notable Milestones

16  The Nigerian Power Sector is bursting with opportunity  Challenges exist but can be overcome  Consistent Government political will is evident in the current privatisation process Conclusion

17 BREAKING NEWS!!!!!

18 Thank You for Listening