A Paris-based independent power producer, Greenwish Partners, is set to invest $280 million to build solar power plants in Nigeria.
Bloomberg news agency reports that the investment is expected to start producing electricity in the first quarter of 2018.
Charlotte Aubin-Kalaidjian, Chief Executive Officer of the company, said a plant in Enugu State will produce 100 megawatts, while the company will build two others of 50MW each in Kaduna and Jigawa states.
Ms. Aubin-Kalaidjian said the project would be funded 70 per cent through debt and 30 per cent through equity, and provide power to 2.5 million people on completion.
“We only take risks where solar makes sense, where it is competitive and where there is political support. This government is very committed to developing power and renewables, especially in regions where there is no gas available,” she said.
Africa’s most populous country faces an 8,000MW energy shortfall, as it currently generates about 4000MW of electricity. Previous plans for new capacity focused on natural gas usage.
In 2016, the Minister of Power, Works and Housing, Babatunde Fashola, introduced a framework to harness the potentials of solar power, thereby giving room for investment from solar (power) producers.
GreenWish moves to sell to the national grid, therefore, was consequent upon a power purchase agreement with the Nigerian Bulk Electricity Trading Plc.
Ms. Aubin-Kalaidjian noted that the transactions are in naira but denominated in dollars, to hedge against the uncertainty in the value of the naira.
Founded in 2014 with a focus on Africa, the GreenWish boss disclosed that the firm currently has a pipeline of more than 1,000 megawatt of solar projects with industrial partners across West Africa.
Commenting on the disparity in the value of the naira as compared to the dollar, the GreenWish boss noted that business transactions in naira create challenges for investors.
“It creates a challenge when the industry has their business linked to the naira,” Ms. Aubin-Kalaidjian said.
“So it’s important to take that into account and structure properly,” she added.