I. Background and Opportunity

Power generation in Nigeria dates back to 1886 when two generating sets were installed to serve the then Colony of Lagos. The Electricity Corporation of Nigeria (ECN) was established in 1951, and in 1962, the Niger Dams Authority (NDA) was created to develop hydroelectric power. In 1972, the ECN and NDA merged to form the National Electric Power Authority (NEPA), responsible for generating, transmitting, and distributing electricity across Nigeria.

In 2005, as part of power sector reforms, NEPA was unbundled and renamed the Power Holding Company of Nigeria (PHCN). The Electric Power Sector Reform (EPSR) Act of 2005 allowed private companies to participate in electricity generation, transmission, and distribution. Consequently, PHCN was divided into:

• Eleven (11) electricity distribution companies (DisCos),
• Six (6) generating companies (GenCos), and
• One (1) transmission company (TCN).

Lagos State, the commercial capital of Nigeria with an estimated population of 20 million, receives less than 1,200 MW from the national grid, while the estimated requirement is 10,000 MW, indicating a significant electricity deficit.

II. Project Overview

4T Technologies Limited is seizing this business opportunity to build power projects using GE as the Original Equipment Manufacturer (OEM) and partner in installation and commissioning. The plants will be 336 MW Combined Cycle Plants (1-1-1 configuration) built as captive power plants in three locations in Lagos to serve specific customers. The project will start with a simple cycle phase (118 MW GTG1), followed by another 118 MW (GTG2), then adding steam plants (50 MW STG1 and 50 MW STG2).

The power will be evacuated through the existing distribution network of the Franchise Distribution Company. Any excess power will be evacuated via a 132 kV and/or 330 kV switchyard to other parts of Lagos or beyond, reaching reliable eligible customers not on any Disco franchise networks.

II. Project Structure and Key Parties

Project Structure

• Design, Build, Finance, Own, Operate, Maintain (and potentially Decommission): The project involves the construction and operation of a Combined Cycle Power Plant (CCPP) with a guaranteed capacity of 336 MW in a power block of 1-1-1 (1 GTG GE Fr. 9e, 1 HRSG, and 1 STG).
• Exhaust Waste Recycling: Exhaust waste of the 1 gas turbine (118 MW) is recycled into the 1 Heat Recovery Steam Generator (HRSG) to produce steam that drives the Steam Turbine, generating an additional 50 MW at no additional cost for gas.
• Power Evacuation: The power will be evacuated through the existing distribution network of local utility companies or transmitted from the plant’s 132 kV switchyard.

Project Scope

• Power Purchase Agreement (PPA) Term: 25 years of power sales to local utility companies, with the possibility of transmitting to other parts of Lagos via the Transmission Company of Nigeria (TCN).

Key Parties

• 4T Technologies Limited: Project sponsor and developer.
• GE: Original Equipment Manufacturer (OEM), supplier, and partner for installation and commissioning.
• Franchise Distribution Company: Local utility company responsible for power distribution.
• Transmission Company of Nigeria (TCN): Potential partner for excess power evacuation.

III. Project Site Location

The 4T-Independent Power Project will be implemented at three different locations in Lagos State:

1. Iba-Oloja, Ibeju-Lekki L.G.A.:
   • Serves: Lagos Free Trade Zone, the new Lagos Ports, Dangote Petroleum & Fertilizer Company, Lagos airport, etc.
   • Current Situation: Over 70% of these areas are without power, and most institutions are reliant on diesel plants.
   • Demand: The 336 MW CCPP will be over-subscribed even before project commencement.
2. Between LBS-Oloko-nla & Abraham Adesanya, Eti-Osa East LCDA:
   • Serves: Estates such as Cooperative Villa, Lekki Phase-2, Abraham Adesanya Estate, Lekki Gardens phases 1-4, Lagos Business School, Royal Garden Estates, Crown Estate, etc.
   • Current Situation: Many communities lack substations and power distribution infrastructures from the Disco in charge.
   • Demand: The 336 MW CCPP will be over-subscribed when available on a 24/7 basis.
3. Between Ologodo-Agungi & Jakande TCN Station Eti-Osa L.G.A.:
   • Serves: Oniru Estate, Lekki Phase-1, UPDC/Elf, Goshen, Nicon Town, Carlton Gate, Lekki Gardens Horizon Estates, Pinnock Estate, Arcadia Grove Estate, Orchid Road Estate, and various 5-star hotels, hospitals, and big oil company representations like Exxon/Mobil and Chevron.
   • Demand: The 336 MW CCPP will be over-subscribed when available on a 24/7 basis.

IV. Key Investment Highlights

• Sector Reforms: Critical energy reforms, including the unbundling of NEPA, have created opportunities for companies like 4T Technologies Limited to build and operate Independent Power Plants.
• Investment Requirements: Significant investment is needed to build and operate the plant, considering the vast majority of credible off-takers.
• Government Support: The Ministry of Energy and Mineral Resources of Lagos State is providing all necessary support and has assured that the gas pipeline will be installed to the battery limit of the power plant.
• Fuel Source: The plant will be dual-fired, with the primary fuel source being Natural Gas and the secondary fuel being Liquefied Natural Gas (LNG).