Process for Unsolicited Procurement

Step 1

At NBET, we have four mandatory requirements for our due diligence exercise.

  1. Land: We request for any one of the following documents relating to your land documents:
    1. Registered title deed to project site
    2. Notarized sale agreement of the project site
    3. Deed of assignment I gift of the project site
    4. Evidence of submission of a title deed to a relevant Land processing agency regarding the project site.
  1. Environmental Impact Assessment (EIA) – Completion of an Environmental Impact Assessment that meets the Federal Ministry of Environment standards. We expect to receive the final and complete EIA report for the project and an approval from the Federal Ministry of Environment
  2. Evacuation: A Complete and comprehensive evacuation study at the project site must be completed and the project must get a provisional evacuation approval from the Transmission Company of Nigeria (TCN). This will provide NBET the comfort that there will be no stranded generation capacity.
  1. Fuel: NBET requires a Gas Supply Agreement from a reputable Gas Supplier.

The above are the four MANDATORY requirements that must be met before NBET starts any negotiation with potential IPPs.

Other additional due diligence documents includes:

  1. Project Partners- Sponsors, technical and financial partners.
  2. Status of License application and other permits.
  3. Project Information – Capacity, Technology, and Project timelines.

Step 2

Once the developer satisfies NBET’s four “MANDATORY” Due  Diligence requirements, NBET will share the Form PPA with the developer which allows him to review before commencement of PPA negotiations. It is important to note that the main body of the Form PPA is NOT to be marked up by the developer.  All proposed modifications to the Form PPA should be inserted in Schedule 1, and is subject to agreement between both parties. Developer will be charged a token fee for due diligence verification.

Step 3

If a Developer does not have a generation licence, but has completed the Bulk Trader’s Four Mandatory requirements, a strong worded Letter of Intent will be issued to NERC indicating NBET’s commitment to procure power from developer and to GACN to approve the allocation of gas to the Developer respectively.

Step 4

Prior to the PPA negotiations, the developer is required to provide an ‘Issues’ list concerning his review of NBET’s Form PPA. Consequently, a date will be scheduled to discuss the issues list and other Project Agreements.

NBET requires the following documents from the Developer during PPA Negotiations:

  1. Financial Model
  2. Transportation Agreement:
    1. For a Gas fired plant; Gas Supply Agreement (GSA) and Gas Transportation Agreement (GTA)
    2. For a Coal plant; Coal Supply and Transportation Agreement
  • For a renewable plant; the Energy Yield Report
  1. Transmission Use of System Agreement (TUOS)

Step 5

The developer is required to initiate a Tender process for Its Engineering, Procurement & Construction (EPC) contract; it is important to note that developer must exercise due care in the execution of the EPC contract. NBET will not entertain any requests from developer to cater for project cost over­ runs after the PPA has been executed. Two other Agreements to be tendered alongside the EPC are the Long Term Service Agreement and the Operation & Maintenance (O&M) Agreement.

Step 6

Finally, when NBET and the Developer agree on the terms in the PPA, the tariffs, and the Developer has completed his bid for the appointment of an EPC Contractor and O&M Contractor in addition to having his LTSA executed, both Parties will execute the PPA.

Process Flow