COODSYNERGYN OIL INDEPENDENT POWER PLANT (CSIPP)
CSIPP has commenced the development phase of its power project, with its power plants set to generate 255MW of power per cycle.
It is in the process of setting up a Dual Fuel (Gas/Liquid) Independent Power Plant to be located in the western region of Nigeria. The project is to be executed with a tendered capacity, in open cycle, of 255MW with turbines and generators supplied by GE or other well established manufacturers/producers.
The plant will have the capacity to allow for future conversion to a combined cycle plant with a capacity of 370MW. This would happen when/if gas prices rise to levels where the revenues from the additional power would outweigh the cost of the conversion.
The plant, promoted by COODSYNERGYN IPP board will be sited in Ijebu- ode, Ogun State with easy access to good roads for the smooth delivery and installation of the plant. The location of the plant is in close proximity to the Escravos Lagos Pipeline System (ELPS) thus allowing for easy access to the primary fuel, gas. The plant site is also be located close to a 330kV sub- Station with sufficient capacity to accommodate the produced for evacuation of to the national grid.
To fast-track the development of the project, the promoter has secured access to three GE Frame 7 Dual Fuel (Gas/Liquid) turbines and generators. It is expected that use of these turbines will cut down project development time by about 18 months. The project has secured the services of Jacobsen Elecktro AS as it technical partner. The project is now at the developmental stage to secure the PPA from NBET and going on to financial closure.
The plant will sell power to the Nigerian Bulk Electricity Trading Plc (NBET) under a Power Purchase Agreement (PPA). The executed PPA would be supported by the Federal Government of Nigeria and a Partial Risk Guarantee to be provided by the World Bank.Project Fundamentals
The project has an IRR of 19% with very sound fundamentals as shown in the overview charts from the Financial Model below.Project Site
The project site is located in the Shagamu Local Government area of Ogun State a long the Ijebu - Ode – Benin Express Way. The site has been acquired and Environmental Impact Assessment (EIA) by the Federal Ministry of Environment has commenced. Consideration was given to proximity and access to gas supply and transmission lines with capacity to absorb the power to be generated by the plant with out a need to up grade the transmission line.Grid Connection
The site location is in close proximity to a 330KV sub-station for easy evacuation of generated power to the transmission grid. A minimum sub- station capacity of 330kV would be required, with capacity to accommodate the power to be generated. An Evacuati on study has been commissioned with the Tr ansmission Company of Nigeria (TCN) to determine the details of the grid connection options.Gas Supply
The site location is in close proximity to the Escravos Lagos Pipeline System (ELPS) to facilitate access to gas supply. The Gas Aggregation Company Nigeria has been approached for allocation of gas through the Domestic Supply Obligation (DSO) of candidate gas suppliers. Discussions and negotiations with the gas suppliers(s) would commence once a Gas Purchase Order (GPO) is issued in favour of the Power Plant. Pricing will also be determined at this time.Power Plant Equipment
The project has secured access to 3 (three) existing (new) GE Heavy Duty 7EA Gas Turbines with a combined capacity to generate 255MW of power and has paid initial deposit on the equipment. It is expected that this will reduce the project development time by about 18 months once the initial project development activities are completed.Consents and Permitting
The required license and permits from the regulator are been processed at the moment, with current the focus on completion of the conditions precedent. The risks of not obtaining consents are considered low as the regulator has already given the nod for the project to be undertaken.Power Purchase Agreement
Negotiations on the Power Purchase Agreement (PPA) with Nigeria Bulk Electricity Trading Plc (NBET) will commence when all costs associated with the generation of power are known and considered. These include cost of setting up the plant, cost of gas purchase, and cost to be incurred to evacuate the power generated to the grid. The PPA, as with other such agreements, will be supported by the World Bank Partial Risk Guarantee, and the Ministry of Finance Put/Call Option Agreement. A letter of intent to enter into a Power Purchase Agreement with Cood Synergyn IPP has been obtained from NBET.Project OutlineThe Project
COODSynergyn intends to develop a 255MW Independent Power Plant in Ogun State (the “Project”). As tangible demonstration of the Sponsors commitment to the Project, COODSynergyn has made a down payment amounting to 30% of the total cost for the three (3) 60Hz General Electric (“GE”) Frame 7 turbines, each rated at 85MW. The Sponsors have also appointed GE as Technical Adviser, to convert the frequency of the turbines from 60Hz to 50Hz, for use in Nigeria; COODSynergyn have approached Techint to act as EPC contractor and has also acquired the land to be used for the Project site.Development and Funding Strategy
The project will be funded by a mix of debt and equity financing from the following sources: Equity (N27.81 Billion representing 20%) : shareholders financing, EPC Contractor: Debt (N117.07 Billion representing 80%) : Central Bank of Nigeria’s Power and Aviation Intervention Fund (“CBN PAIF”), Export Credit Agency (“ECA”), International and Local Lenders.Current Needs
COODSynergyn’s immediate current financing need is to access the CBN PAIF to support the purchase of the three (3) 60Hz General Electric (“GE”) Frame 7 turbines;GE - Overview
GE has been operating in Nigeria for over 40 years, with businesses spanning a number of key sectors including aviation, power generation, oil and gas, healthcare, and transportation. GE - Overview GE has partnered with a number of local power-generation companies in Nigeria to ramp up electrical output throughout the country. In the last 5 years, GE has made the following power plants fully operational – producing electricity for the people of Nigeria. Today, GE in Nigeria employs over 500 Nigerians and serves over 100 public and private sector customers from its offices in Lagos, Port Harcourt, Onne and Abuja.TECHINT - Overview
TECHINT provides engineering, procurement, construction, operation and management services for large-scale projects in worldwide locations. TECHINT - Overview TECHNIT has almost 70 years of experience, employs 19,500 people worldwide and has completed more than 3,500 projects in compliance with ISO/BS/OHSAS international standards in America, Europe, Middle East and Africa. Currently, the company delivers services in the following market segments: Oil & Gas, Energy, Industrial Plants, Oil Refineries and Petrochemical Plants, Mining, and Infrastructure and Architecture Civil Works.Our Approach
Based on our experience with similar greenfield projects, we have categorized the activities that are required to complete the development of the Project as shown in the illustration below.1: Pre- Construction
Engagement of financial adviser -
Determine optimal financing structure and funding requirement -
Secure CBN phase 1 required funding for the turbines -
IN PROCESS2: Construction
Appointment of independent consultants;
Drawdown of Phase 2 Commercial Bank construction funding;
Construction monitoring on behalf of Lenders and CBN; Secure working capital funding (raised separately, before project commercial operation)
Secure funding for reserve accounts (being structured into financing plan) Conclude on consents, permits and approvals;3: Operations
Drawdown of working capital funding; Fund reserve accounts movements;
Commence Operation and sale of power generated; Commence principal repayment and interest service;
Optimise capital structure via possible refinancing to exploit the lower risk profile of the project at this phaseIndicative Financing Strategy and Structuring Considerations