Projects to be financed 70% through debt, 30% through equity
Company has signed power-purchase deal with electricity trader
GreenWish Partners, a Paris-based independent power producer, will invest $280 million to build solar-power plants in Nigeria that are expected to start producing electricity in the first quarter of next year.
A plant in the southeastern state of Enugu will produce 100 megawatts, while the company will build two others of 50 megawatts each in the northern Kaduna and Jigawa states, Chief Executive Officer Charlotte Aubin-Kalaidjian said in an interview in Lagos. The project will be funded 70 percent through debt and 30 percent through equity and on completion will provide power to 2.5 million people, she said.
“We only take risks where solar makes sense, where it is competitive and where there is political support,” Aubin-Kalaidjian said. “This government is very committed to developing power and renewables, especially in regions where there is no gas available.”
Nigeria, Africa’s most populous country of more than 180 million people, faces an 8,000-megawatt energy shortfall, having capacity to generate only about 4,000 megawatts of electricity. Most plans for new capacity focused on using natural gas from the southern petroleum region until the Power, Works and Housing Minister Babatunde Fashola’s introduced a framework to accommodate solar-power producers last year.
That has resulted in a power-purchase agreement with the Nigerian Bulk Electricity Trading Plc, the clearing house of the local electricity market, to enable GreenWish sell to the national grid. The transactions are in the local currency but denominated in dollars to hedge against naira-value fluctuations, Aubin-Kalaidjian said.
Nigeria has struggled to meet its foreign-currency needs since the price of crude, its main export, tumbled from peaks reached in mid-2014 and militant attacks in the oil-rich Niger River delta cut output. Shortages have put pressure on the naira, causing it to lose more than a third of its value in the past year.
“It creates a challenge when the industry has their business linked to the naira,” Aubin-Kalaidjian said. “So it’s important to take that into account and structure properly.”
Founded in 2014 with a focus on Africa, GreenWish currently has a pipeline of more than 1,000 megawatt of solar projects with industrial partners across West Africa, according to Aubin-Kalaidjian.