Qua Iboe Power Plant Agrees 540 MW Power Purchase Agreement
Abuja, 26 October 2017 – Qua Iboe Power Plant Limited (“QIPP”) and the Nigerian Bulk Electricity Trader Plc (“NBET”) today agreed a Power Purchase Agreement (“PPA”) for a 540MW gas-fired power plant in a ceremony presided over by Hon. Minister of Power, Works & Housing, Mr Babatunde Fashola. The power plant, to be located in Akwa Ibom State, is expected to cost ~$1.1 billion. In addition, QIPP, NBET, the Nigerian National Petroleum Company (“NNPC”) and the Ministry of Finance, on behalf of the Federal Government of Nigeria (“FGN”), agreed a Put/Call Option Agreement (“PCOA”). The PCOA details the FGN’s obligations supporting QIPP’s PPA.
QIPP is jointly developed by African energy infrastructure company Black Rhino Group, Dangote Group and the NNPC, following the purchase of the rights to develop the project from Mobil Producing Nigeria Unlimited, a joint venture between ExxonMobil subsidiary Mobil Producing Nigeria and the NNPC.
QIPP will be one of the lowest cost thermal power plants in Nigeria due to its efficient combined-cycle design and competitive gas price. QIPP will receive gas from Mobil Producing Nigeria (“MPN”) under a 20-year Gas Sales Agreement via a new 400mmscfd undersea gas pipeline from MPN’s existing offshore production facilities. The power plant also unlocks investment in transmission infrastructure, including a new 58km transmission line to be built by QIPP.
Black Rhino Chairman, His Highness Emir Muhammad Sanusi II, said, “QIPP will utilize Nigeria’s gas resources to increase our electricity generation capacity and reduce the cost of power. QIPP is an example of how the FGN and private investors can work together to develop infrastructure that has a real socio-economic impact in our country.” Black Rhino CEO Brian Herlihy added, “We believe that QIPP will catalyze further infrastructure investment in Nigeria and support the FGN in building a sustainable power sector that works for all Nigerians”.
QIPP is the most advanced project jointly developed by Black Rhino Group and Dangote Group since the firms announced their partnership to jointly invest in African energy projects. Aliko Dangote, CEO of Dangote Group, added, “Black Rhino Group and Dangote Group partnered to develop transformational projects such as QIPP. By closing the gap between Nigeria’s generation capacity and the energy required to underpin economic growth, we are supporting Nigeria’s future industrial growth.” GMD NNPC, Dr. Maikanti K. Baru, added “The NNPC/MPN JV will work to support the Qua Iboe Power Plant in line with the Federal Government’s initiatives for power sector developments in Nigeria.”
QIPP benefits from a World Bank-approved $150 million Partial Risk Guarantee, and an Environmental Impact Assessment and Resettlement Action Plan approved by the Federal Ministry of the Environment. The project will continue with the advancement of its project finance program and seeks to reach financial close in H2 2018. QIPP is expected to commence construction shortly thereafter and commence commercial operations in H2 2021.
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