Solar power energy is really breaking grounds as Federal Government signed two put and call option agreements (PCOAs) with two of the 14 large scale solar power firms that have indicated interests to build and generate up to 1125 megawatts (MW) of solar power for Nigeria’s national grid.
The government had through the Nigerian Bulk Electricity Trading Plc (NBET), signed power purchase agreements (PPAs) with the 14 solar independent power plants (IPPs) in July 2016.
It was however supposed to sign the PCOAs with the firms a month after the initialing of the PPAs but could not because of long periods of negotiations on the Partial Risk Guarantees (PRG) for the projects with the World Bank and African Development Bank (AfDB).
The PCOAs serve as indemnity for the project promoters to go ahead with their constructions and ultimately bring their power to the grid.
Also, the 14 solar projects are reportedly worth $2.5 billion, and domiciled more in the northern parts of the country where solar radiation is mostly high.
However, at a ceremony in Abuja, the NBET signed the first two PCOAs with Afrinergia which would be constructing a 50MW solar farm in Nasarawa State and CT Cosmos which has a 70MW solar power project in Plateau State.
The ceremony was superintended by the Minister of Power, Works and Housing, Mr. Babatunde Fashola, who reiterated the government’s commitment to diversify the country’s energy source, as well as create an enabling environment for investors to grow the sector.
Fashola said the PCOA signing was in furtherance of the plan to generate at least 30 per cent of Nigeria’s electricity from renewable energy sources.
He said government would go on to support others to conclude their PCOAs and deploy to site.
It was noted that the company could transmit the first ever solar power into Nigeria’s national grid in the next six months.
As said by our source “In a lay man’s term, the power sector has been privatized over the years and the government is not really acting in the production of power, but they have said they will guarantee the payment on behalf of Nigerians and what you have seen today is that they are guaranteeing that if we generate power, they will pay in case Nigerians don’t pay for power. So, the government is standing in the gap and saying, they will pay but go and produce power,” Source;Thisday