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IG for the Pan Africa Katsina Solar Power Project

Region
Western Africa
Sector
Energy
Scope
IG
Grant Amount
EUR 4,000,000
Total project cost
EUR 150m
Status
Approved
PFG Lead Financier
PIDG

This utility scale ground mounted solar Photovoltaic Power Plant will be located in Katsina State. The expected size is 87 MWp. The project focuses on a stable state in the North of the country, where—due to lack of available hydro resources and gas supply—renewables are the only long term sustainable option. The project will be constructed on a plot of 120 hectare of land located 3.66km from the nearest substation, located in Kankia. The project is expected to cost circa €150m to construct. The Sponsors are a consortium including JCM Clean Power Development Fund LP, a Canadian renewable energy developer, and Pan Africa Solar Holdings, a solar developer working on a portfolio of projects in Nigeria.   

The offtaker of the electricity will be the National Bulk Electricity Trader (NBET) under a Power Purchase Agreement (PPA) with a fixed tariff and 20 year tenor. The connection line to the substation will be owned by the Transmission Company of Nigeria (a Federal Government parastatal), with the works being carried out under a competitively bid EPC contract.

A transmission line and switchyard station needs to be funded and constructed to connect the solar farm to the city of Katsina. If the project were to assume this cost, then the tariff would need to increase thereby making the power less affordable. Consequently, an investment grant was sought to cover the cost of constructing the transmission line thereby enabling the project to provide a more affordable tariff. The investment grant will be invested directly in the construction of the transmission line and switchyard (the progress of which will be monitored by the NSIA) and will belong to the state-owned Transmission Company of Nigeria. With the support of the EU-AITF, the Sponsors were able to reduce the tariff even further for NBET in order to increase the sustainability of the rate of the operation of the plant.

12/2017