The corporation said plans for the 14 utility-scale power project to be delivered under the project have been stalled as it could not finalise agreements with the Nigerian Government.
Some international donors have threatened to withdraw $300m funding for its proposed Nigeria’s “first utility-scale solar project”, TheCable reports.
In a letter dated September 10, 2019 and addressed to the Managing Director of the Nigerian Bulk Electricity Trader, Marilyn Amebi, the African Finance Corporation noted that it had been working on the 1,000 megawatts project for a year with its partners – the African Development Bank and the Green Climate Fund.
The corporation said plans for the 14 utility-scale power project to be delivered under the project have been stalled as it could not finalise agreements with the Nigerian Government.
It added that the Independent Power Projects are in line with government’s continued focus on climate finance investments.
“Specifically, we hope to be able to provide total debt financing in the region of $300m including up to $100m of concessional funding from GCF.
“However, if we are unable to demonstrate significant progress in resolving the outstanding matters on the Power Purchase Agreements and the Put Call Option Agreements by October 2019, then key approvals, such as the $100m approval we have obtained from GCF will lapse for a second time and the funding will be withdrawn.
“We believe that the funding under consideration, which include a concessional element, will assist in attaining the target tariff of US7.5/kWh and also help reduce the perceived risks of investing in the Nigerian renewable energy sector and subsequently catalyse private sector investment in the sector with associated direct benefits such as job creation and social upliftment.”
The AFC said the sponsors had been given letter of authorisation with regard to the project, while it called for a meeting with NBET to finalise the agreements.