Funmilayo Dodondawa, Lagos
Dr Sam Amadi, Chairman of the Nigerian Electricity Regulatory Commission (NERC), has issued an on-grid 1,080megawatts (MW) generation licence to Oma Power Generation Company Limited.
The gas-fired power plant, Oma Power said will be located at Orgwu- Ogwe, Ukwa West, in Abia state.
Speaking during the ceremony at NERC headquarters in Abuja over the weekend, Dr Amadi described the granting of the 1080mw capacity license as an ambitious project.
He Recalled that Egbin Power, which is located in Lagos, is the first generation company in the history of the power sector to have been issued a licence of such magnitude.
Recently, NERC had issued a similar license to Zuma Energy Nigeria Limited to operate a combined 1,200MW coal power plant in Itobe, Kogi state.
The company’s delegation was led by the Director, Business Development and Project Finance, Tim Onomiwu while other NERC officials at the event were the Commissioner, Legal Licensing and Enforcement (LL & E), Dr Steven Andzenge and Mary Awolokun, Health, Safety and Engineering (HS & E) Commissioner.
Mr. Onomiwu in his response assured the Commission that the license terms will be adhered to. He said the company’s development partners who are GE and Geometrics are negotiating project agreement and finances to ensure the takeoff of the project which will be built in three phases.
NERC also recently issued on-grid generation licenses to Zuma Energy Nigeria Limited to construct four units of 300 megawatts coal-to-power plants in Kogi State at a total cost of $5billion (N1.2trillion).
According to NERC, the firm was initially issued an on-grid license on September 20, 2011 to enable it to operate a 1,200MW independent power plant.
The Chairman, NERC, Dr. Sam Amadi, however, said that on July 31, 2014, the company submitted an application for an amendment to enable it to assign the licence to four different Special Purpose Vehicles to build a 300MW plant each.
“Following the completion of the application, the commission passed a resolution dated November 11, 2014 authorizing the company to publish the statutory notices in line with the mandatory provisions of Section 70(2) of the EPSR Act. The commission on December 18, 2014 approved the recommendation to amend and assign licence No. NERC/LC/066 to the plants,” Amadi said.
The Chief Executive Officer, Zuma Energy Nigeria Limited, Dr. Innocent Ezuma, said it would cost the firm about $5billion to build the four plants.
“By the reason of receiving these licenses, we must hit the ground running. Very soon, we will see the approval of a tariff for the four SPVs that will enable us execute the Power Purchase Agreements and by the end of this year, the groundbreaking of the first unit of the Itobe 1 coal-to-power 300MW plant in Kogi State will be done,” he said.
On why the 1,200MW plants will be constructed in segments of 300MW each, Ezuma said, “Basically, it is for ease of implementation. As you may understand, to build one megawatt coal power station, you will require about $3million. So, if you are building 1,200MW, you will require approximately $5billion, and this is a huge amount of money for any investor at this time when Nigeria is just beginning to tap into its coal resources.
“With the sub-division of these licenses, it means that we can embark on two projects simultaneously at a time. The timeline for the construction of a coal-fired power plant is from two-and-half to three and- half years.”
Ezuma said the equity for the plant had been over-subscribed by investors, stressing that the firm’s financial partners were aware of the huge capital outlay needed for the project.
He said, “Power plants are not funded solely. The development phase of a power plant is always funded by sponsors. But as I speak to you, Zuma Energy has invested huge sums of money in developing this plant up to this level solely.