THE prospective investors of the 500 megawatt gas-powered plant in Sapele, Delta State- Proton Energy, said the outfit’s initial capacity is projected to cost approximately $200 million and would be funded on a project finance structure of 70 per cent debt and 30 per cent equity basis.
The funding, according to the company, would also be facilitated by mixture of both local and international sources.
Already, the Nigeria Bulk Electricity Trading Plc (NBET) has received from Nigerian Electricity Regulatory Commission (NERC), the name of Proton Energy, among others, seeking licenses for Power Purchasing Agreement (PPA).
The Vice Chairman and former Managing Director of Keystone Bank, Oti Ikomi, however said the plant initial projections may go up when the power plant is expanded to 500 megawatts.
Meanwhile, Proton Energy said it is partnering with IL&FS Energy, a leading infrastructure development and finance company in India.
The company, with offshore investments planned in Tanzania for a 200-megawatt natural gas plant and another 500 megawatts wind power project, is likely to provide equity funding and support on the debt funding.
Ikomi noted that the documents required for IPP licence to operate had long been submitted to NERC and discussions are at advanced stage with others that are strategic to its fruition.
“We have received PPA draft from NBET and we will be seeking 20 year agreement that guarantees 100 per cent off-take. We will begin negotiation once the ESIA is completed”, he said.
This development supports endorsement of processes so far undertaken by Proton Energy in its bid for a licence to set up and operate a 500 megawat gas-powered plant in Sapele.
According to the company, the Chairman of NERC, Sam Amadi, had hinted that the commission now expects the company to complete all that is required of it in the entire process for a power licence.
“We expect that the company will expedite actions to ensure that all mandatory requirements is met and we expect correspondences from other bodies involved to confirm that Proton have met every requirements”.
To get tbe licence however, Proton will have to show evidences of satisfying the requirements of bodies like Transmission Company of Nigeria TCN, NBET and other companies that are critical to the award of a power licence.
The Managing Director, NBET, Rumundanka Wonodi, also confirmed that Proton Energy is on the list of power licence prospectors that have advanced in the processes and have been issued with PPA draft to kickstart negotiation.
“We have sent a PPA draft and the first schedule to Proton Energy to get it to understand the processes and what is required of it. What we expect from the company now, are list of issues and those that it had complied with” Wonodi said.
Proton Energy is prospecting to boost power supply at the Sapele plant, with initial installed capacity of 150megawatts, which will be expanded to 500 megawatts at its completion, using Siemens technologies.
On gas supply, Ikomi explained that application had been submitted to gas aggregator, while supply discussions are at advanced stage and will soon be formalised in commercially acceptable agreement.
“We are discussing with other independent gas producers and looking at a daily gas supply of 40mmscf for our operation. We expect shortly a letter of comfort from our gas supplier,” he said.
The Proton Energy consortium, already had meetings with the ministers of Finance and Power, in Prof. Chinedu Nebo, pledged his support and offer of ongoing assistance for the project.
According to the company, the minister commended Ikomi for assembling a highly experienced consortium of local and international businesses, all focused on further advancing the power sector reform in the country.