ABA CLEAN ENERGY CARBON PROJECT Bruce Johnston FIRST IPP IN NIGERIA.

ABA CLEAN ENERGY CARBON PROJECT

Bruce Johnston

FIRST IPP IN NIGERIAFIRST IPP IN NIGERIAFIRST IPP IN NIGERIAFIRST IPP IN NIGERIA

Aba

Genesis of Aba IPPGenesis of Aba IPPGenesis of Aba IPPGenesis of Aba IPP

December 2000 – Geometric Power Limited (GPL) (sponsor and developer of Aba IPP Project) launches the Abuja 22MW Emergency Power Plant

March 2004 – President Obasanjo approves GPL’s Aba IPP as first privately financed project

May 2004 – Minister of Power and Steel, MD/CEO of NEPA and GPL sign an MOU to build the Aba IPP according to the President’s directive

April 2005 – Minister of Power and Steel, MD/CEO of NEPA and APL sign an agreement for the lease of NEPA assets in Aba by APL for 15 years

August 2005 – President allocates supply of gas for the Aba IPP in the National Gas Master Plan

Project Background Project Background Project Background Project Background

Current situation – Industries and other consumers presently depend on expensive diesel generation for a substantial part of their production because of inadequacy of the power supply from the national grid

Aba IPP Project – Will supply reliable power to industries, commercial businesses and residential homes in Aba through construction and operation of 140 MW gas fired power plant

Downstream – Construction of own industry-centred distribution lines: several industries poised to expand production capacity if reliable low-cost power supply is assured

Other Customers – Commercial and residential consumers to receive power through distribution lines in “ring-fenced” network leased from PHCN

Project DescriptionProject DescriptionProject DescriptionProject Description

Structure Island model disconnected from the national grid and serving

industrial and residential customers

Power Station Installed capacity of approximately 140 MW comprising 3 gas

fired open cycle turbines with opportunity for expansion EPC Contractor to construct, install and commission power

plant on turnkey basis Subsequent procurement of O&M Contract

Distribution Lines 33 KV distribution lines to be constructed from power station

to supply reliable power to GPAL Customers through seven distribution substations

Project Description (Cont.)Project Description (Cont.)Project Description (Cont.)Project Description (Cont.)

Substations 33 KV Power Station substation with eight outgoing 33 KV

Feeders to be constructed for evacuation of power generated at the Power Station

New Distribution Substations Four distribution substations to be constructed within the city

of Aba and equipped each with 2x15 MVA 33/11 KV transformers to supply power to GPAL customers Osisioma Ogbor Hill Factory Road Port Harcourt Road

Project Description (Cont.)Project Description (Cont.)Project Description (Cont.)Project Description (Cont.)

Leased Distribution Substations

Three distribution substations (each equipped with 2x15 MVA 33/11 KV transformers) leased from NEPA to supply power to residential and commercial customers through APL

NEPA Aba Control Substation

NEPA Power Station Substation

NEPA Umuode Substation

The Clean Energy ProjectThe Clean Energy ProjectThe Clean Energy ProjectThe Clean Energy Project

Nigeria's first Clean Energy Carbon Project to benefit from the Clean Development Mechanism ("CDM") established under the Kyoto Protocol.

Project has qualified for $9 million carbon grant from the Community Development Carbon Fund (CDCF) (set up by the World Bank).

Carbon FinanceCarbon FinanceCarbon FinanceCarbon Finance

General term applied to financing under which a Fund/entity seeks to purchase greenhouse gas emission reductions ("carbon" for short) to offset emissions in the OECD.

Under Carbon Finance arrangements (or ERPA) a clean development project in a developing country can "sell" carbon credits, obtained by replacing more polluting projects, to buyers in industrialised countries seeking to meet their Kyoto obligations to reduce emissions in those countries.

Community Development Carbon FundCommunity Development Carbon FundCommunity Development Carbon FundCommunity Development Carbon Fund

A public-private partnership of governments and 16 companies and organisations managed by the World Bank.

Designed to provide communities in developing countries, and in particular least developed countries, with an opportunity to benefit from new investments in renewable energy and clean technologies that aim to reduce greenhouse emissions and mitigate effects of climate change, while improving the welfare of the communities involved.

Community development benefits of ABA Project include access to electricity, construction of a school, health centre and a road for the surrounding communities of Aba Plant.

ABA IPP Investment StructureABA IPP Investment StructureABA IPP Investment StructureABA IPP Investment Structure

CDCF

Carbon Funding

ABA IPP Power Delivery ModelABA IPP Power Delivery ModelABA IPP Power Delivery ModelABA IPP Power Delivery Model

Gas Supplier

Gas Transporter

Allocation of Power Plant CapacityAllocation of Power Plant CapacityAllocation of Power Plant CapacityAllocation of Power Plant Capacity

Unregulated Customers

At least 60% to industries directly via new GPAL owned distribution lines and substations

Regulated Customers

Up to 40% to residential and commercial customers via APL leased PHCN distribution lines and substations

Power Purchase AgreementsPower Purchase Agreements Power Purchase AgreementsPower Purchase Agreements

Unregulated Supply Each industry off-taker will sign PPA with GPAL Each industry off-taker will provide payment security in the

form of revolving bank guarantee Industry off-takers will pre-pay for one month supply Tariffs

Regulated Supply Each customer will sign a Standard Connection Agreement

(with APL) Customers will use pre-pay meters Tariffs

Gas SupplyGas SupplyGas SupplyGas Supply

Requirement

Plant requires ~43 mmscf/day

Supply

Primary fuel is natural gas supplied through a pipeline from Imo River and the gas gathering field in Owaza and Obigbo

GPAL will sign a GSA with Gas Supplier

Transportation

To be transported through a new pipeline constructed by separately procured gas transporter

GPAL will sign a Gas Transportation Agreement with Gas Transporter

ABA CLEAN ENERGY CARBON PROJECT

Bruce Johnston

FIRST IPP IN NIGERIAFIRST IPP IN NIGERIAFIRST IPP IN NIGERIAFIRST IPP IN NIGERIA