The Federal Government and the developers of the 540-megawatts Qua Iboe Power Plant signed a Power Purchase Agreement for the development of the $1.1bn electricity generation station on Thursday.
The Dangote Group, Nigerian National Petroleum Corporation and Black Rhino Group, an African energy infrastructure company, signed the PPA with the Nigerian Bulk Electricity Trading Plc, an agency of the Federal Government, in a ceremony that was presided over by the Minister of Power, Works and Housing, Babatunde Fashola, in Abuja.
The 540MW power plant, located in Akwa Ibom State, is being jointly developed by the three firms following the purchase of the rights from Mobil Producing Nigeria Unlimited, a joint venture between ExxonMobil subsidiary, Mobil Producing Nigeria, and the NNPC.
The developers stated that the plant would be one of the lowest cost thermal power plants in Nigeria due to its efficient combined cycle design and competitive gas price.
The plant, according to them, will receive gas from Mobil Producing Nigeria under a 20-year Gas Sales Agreement via a new 400 million standard cubic feet per day undersea gas pipeline from MPN’s existing offshore production facilities.
They also noted that the power plant would unlock investment in transmission infrastructure, including a new 58-kilometre transmission line to be built by the QIPP.
The Chairman, Black Rhino Group and Emir of Kano, Muhammad Sanusi II, said the project would have real socio-economic impact on Nigeria.
“The Qua Iboe Power Plant will utilise Nigeria’s gas resources to increase our electricity generation capacity and reduce the cost of power. The plant is an example of how the Federal Government and private investors can work together to develop infrastructure that has a real socio-economic impact on our country,” he said.
The Qua Iboe Power Plant is the most advanced project jointly developed by the Black Rhino Group and Dangote Group since the firms announced their partnership to invest in African energy projects.
The Chief Executive Officer, Dangote Group, Aliko Dangote, said, “The Black Rhino Group and Dangote Group partnered to develop transformational projects such as the Qua Iboe Power Plant. 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.”
It was gathered that the power plant was benefitting from a World Bank-approved $150m Partial Risk Guarantee, and Environmental Impact Assessment and Resettlement Action Plan approved by the Federal Ministry of Environment.