US Firm to Build a Gas-Fired Independent Power in Nigeria

US Firm to Build a Gas-Fired Independent Power in Nigeria

Nov 16, 2004 (LiquidAfrica via COMTEX)

Electricity generation in the country is set to receive another major boost as a US-based firm is set to partner with an indigenous company and the Kwara State Government to build a gas-fired Independent Power Plant (IPP) worth $275 million (N36.6 billion).

However, to bolster investors' confidence in setting up more of such private power plants across the country, the Federal Government has approved the direct sale of electricity from IPPs to industries.

The arrangement will exclude the National Electric Power Authority (NEPA) from sales purchase negotiations.

US-based Black and Veatch is partnering a Nigerian firm, Alliance Energy Limited (AEL) and the Kwara State government, to build the power plant that will generate 105 mega watts (MW) of electricity.

The proposed plant, according to the approval granted the project by the Ministry of Power and Steel, will be operated on the Generate, Transmit and Distribute (GTD) scheme.

It was furthered gathered that while AEL and the Kwara State government will provide funding for the project through a combination of equity and debt finance, Black and Veatch will provide the technical expertise as well as act as project consultants.

Officials working on the project said of the $275 million total cost of the project, construction of a gas pipeline that will run from Ajaokuta spur-line to the site of the plant in Ilorin, the Kwara State capital, will gulp $170 million and will be handled by the Nigerian Gas Company (NGC).

The power plant which is expected to be completed in 2006, will consume some 126 million standard cubic feet of gas per day at 27bar pressure.

"Investors are attracted to Kwara State because it is highly endowed with rich and fertile agricultural land and mineral resources," a source close to the project said.

He added the government recently awarded several hectares of land to Zimbabwean farmers and several factories are springing up, hence the need for constant power supply.

Speaking on the project, Governor Bukola Saraki of Kwara State, said his administration aimed to be the first state to attain uninterrupted power supply in the country.

"We are determined to ensure stable power supply in Kwara State as part of efforts to boost industrialisation and provide employment," said Saraki.

"Apart from the gas-fired power plant by Alliance Energy Ltd. the government will also explore opportunities to generate electricity from coal," he added while urging the IPP promoters to ensure that the plant is completed on schedule.

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