The Nigerian Bulk Electricity Trading Plc (NBET) has announced that 10 (Ten) of the Eleven (11) Independent Power Producers (IPPs) that executed the Front-Runner Solar Power Purchase Agreements (PPAs), on July 21, 2016 successfully posted their Development Securities to NBET on the due date of September 9th, 2016.
This was contained in a press statement signed and issued by the management of the company in Abuja on Thursday.
According to the statement, a key requirement of the contract is for each developer to post a $20,000 per MW Development Security Letter of Credit which provides security for the IPPs obligation to achieve the Financial Closing Date by the Target Closing Date (i.e. 6 months after the execution of the PPA) or the Long Stop Closing Date (the date beyond which the Target Closing Date may not be extended) as set in the Schedule 1 of the PPA.
The Development Security will be refunded to the IPP when the closing date is met after which the IPP will begin construction of the plant.
“It is important to note that the additional three (3) IPPs that executed their PPA are expected to post their Development Security on their due date of September 28th 2016 and October 02, 2016.
“Furthermore, NBET notes that the posting of development security by 10 out of the 11 IPPs that were due is a testament to investor confidence in the Nigerian power sector and continued interest in the development of same,” the statement read in part.