Energy

FG, Kingline Power sign $550m power plant agreement

The Federal Government and Kingline Power Limited on Thursday signed a Power Purchase Agreement for the construction of 550 megawatts power plant worth $550m (N168.8bn at N307 to one dollar).

Both parties signed the agreement at the headquarters of the Federal Ministry of Power, Works and Housing in Abuja, with the Nigerian Bulk Electricity Trading Company Plc signing on behalf of the Federal Government, while the Chief Executive Officer, KPL, Seam Kim, signed for his company.

Kim said that with the PPA signing, the financing of the project would begin in earnest, as its financial closure was expected to happen in the third quarter of 2018.

He stated that the firm had assembled the best personnel to execute the project, adding that with the signing of the PPA, the firm would go ahead to close other transactions that would see to the successful construction of the plant.

The Nigerian Electricity Regulatory Commission issued a power generation licence to the Ondo State Government and its partner, Kingline Development Company, a South Korean firm, to generate 550MW of electricity in March last year.

Officials of the state government and their partners had stated that the licence would see to the realisation of the first phase of the Kingline Ondo Independent Power Plant project.

The Business Development Director and Head of Nigeria Operations, Kingline Development Company, Mr. Akinnola Fola, who announced the issuance of the licence in Abuja, said the promoters of the IPP were very excited about the development.

He explained that the actual construction of the plant would commence in June, adding that “the project is in the final stage before achieving finance close.”

In 2015, the Ondo State Government sealed an engineering, procurement and construction contract with POSCO E & C of South Korea for the first phase of the proposed 1,100MW Independent Power Project.

The first phase of the project involves the construction of a gas-fired power plant that will generate 550MW of power to be fed to the national electricity grid. The second phase is expected to add another 550MW.

POSCO is to see to the design, engineering, procurement, construction, inauguration and testing of the 550MW open cycle gas turbine power plant.

Actual construction is expected to take about 26 months from the commencement and date of issuing the notice to proceed.

In his remarks at the PPA signing ceremony in Abuja on Thursday, the Minister of Power, Works and Housing, Babatunde Fashola, stated that the government would continue to support initiatives that would increase the country’s power generation.

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