The Power Purchase Agreement (PPA) between Kingline Development (KLD) and Nigeria Bulk Electricity Trading Plc (NBET) for construction of 550Mega Watts(MW) plant valued at 550million dollars will boost confidence of would-be investors in the project.
KLD’s Managing Director, Akinnola Fola, said this in an interview with journalists in Abuja on Sunday.
Fola, who was speaking on the 550 million dollar power plant, said the signing of the PPA for the development of the plant, would further take the discussions with lenders to a different levels.
“When you have the PPA signed, it gives some kind of credibility to would-be investors and lenders, the reasons being that the PPA is so important to the power business.
“So, signing the PPA indicates that finally the project is ready to go and that investors and lenders are now ready to support the project,“ he said.
He said the benefit of the PPA to the project would guarantee the addition of 550MW of electricity to the national grid when completed.
This, the Managing Director said, would ensure sustainability and government’s effort to generate and distribute additional power to Nigerians.
He also said that the PPA arrangement to the project would ensure future power stability in the country.
“You have a power purchase agreement that will ensure that in the next 20 years you are going to get power at a particular price.“
He said the project sited in Ondo would attract foreign direct investments into the state through increased economic activities and employment generation for all cadre of labour during construction.
“The PPA that has been signed, we still need to have some transaction agreements with lenders and financiers, then we are looking at third quarter 2018 to archive what is called financial close.
“After that we have 24 months to do the construction; so, tentatively we are looking at first quarter 2020, before we start what we call commercial operation deal,“ he said.
Fola said given the availability of all energy resources, Nigeria had the capacity to be sufficient in power production.
“We have adequate gas; we have enough water, rivers and wind. When you look at these natural resources that are available, there is no reason why we can’t produce adequate power.
“The presence of independent power producers in the country is a right step in the right direction taken by government.”