Nigeria government signs MoU with IPP consortium for 300 MW of solar power


The Nigerian government has this week signed a Memorandum of Understanding (MoU) with a consortium of independent power producers (IPPs) for the development of 300 MW of new solar PV capacity.

Nigeria’s Nigus Greenergy and South Africa’s Volt Renewables have formed the consortium that signed the MoU in a $600 million investment agreement that was facilitated by the Nigerian Investment Promotion Commission.

Germany’s LTi ReEnergy will supply its central inverters to the projects, which are already under development and expected to be completed by 2017.

The 300 MW project will comprise three, 100 MW solar plants located in the northern Nigerian regions of Yola in Andamawa State; Kano in Kano State, and Birnin in Kebbi State. Once commissioned, the plants will represent 10% of Nigeria’s current national generation capacity, said the Nigus Greenergy press release.

Nigeria’s National Bulk Electricity Trader (NBET) will sign a power purchase agreement (PPA) for the solar energy developed, according to local media reports. Earlier this month NBET signed off on 975 MW of solar PV PPAs with 12 separate solar developers currently working on PV projects in the country.

"Our consortium partners believe that solar energy is the perfect solution for these states, which are blessed with strong solar resources as the power plants have the ability to be commissioned quickly and on a distributed basis, making a real difference to the economy," said Nigus Greenergy’s Princa Malik Ado-Ibrahim.

Volt Renewables’ Nathan Schmidt added that the project represents the realization of "much-needed capacity" for the Nigerian electricity grid, calling the MoU a "small but significant start" to the improvement of local communities in the regions mentioned.

LTi ReEnergy will seek to partner with local companies under its "German Heart – local content" logistics model, which entails shipping the integral part of its central inverters from its manufacturing base in Germany, but sourcing the remaining components required to build a central inverter from recognized localization partners. This approach delivers a level of ownership and entrepreneurialism for local companies, LTi believes.

In recent months Nigeria’s nascent solar hopes have been trimmed due to falling oil revenues severely impinging on the government’s cash flow, exacerbating an already fragile economic climate as growth has slowed and the country’s foreign currency reserves dwindled. Amid these straitened times, investment in renewable energy has taken a hit, even in the face of growing power shortfalls across the country.

Nigeria only has around 4 GW of power capacity across the entire land of 173 million people, meaning the vast majority go without power, or at least reliable electricity connection, regularly. With abundant solar irradiation, PV has long been viewed as the perfect solution to this severe shortfall, but the lack of foreign currency in the country and the continued devaluation of the naira (Nigeria’s currency) makes foreign investment into Nigeria unattractive at best and risky at worst.

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