1. .
The Roadmap for
Power Sector Reform
“The growth, prosperity and national security of any country is critically dependent upon the
adequacy of its electricity supply industry. Indeed the link between electricity supply and
economic development is such that the health of the industry is a matter of deep and personal
concern to all citizens. Nigeria is no exception. Over the past two decades, the stalled
expansion of Nigeria's grid capacity, combined with the high cost of diesel and petrol
generation, has crippled the growth of the country's productive and commercial industries. It
has stifled the creation of the jobs which are urgently needed in a country with a large and
rapidly growing population; and the erratic and unpredictable nature of electricity supply has
engendered a deep and bitter sense of frustration that is felt across the country as a whole
and in its urban centres in particular.”
– The Roadmap for Power Sector Reform

2. .
PRESIDENTIAL ROADMAP ON POWER – A short history .
1) Pre - May 2010
i. The Electric Power Sector Reform Act enacted (EPSRA 2005).
ii. NEPA unbundled into Successor companies with PHCN as the
holding company
iii. Nigerian Electricity Regulatory Commission NERC created & later
suspended
iv. A multi-billion dollar National Integrated Power Projects ( NIPP)
started and later stalled
v. Reform stalls until President Goodluck Jonathan assumes office
in May 2010.
1) Post - May 2010
i. President Jonathan chooses Power as one of his cardinal
programmes.
ii. The stalled NIPP program resumes in earnest.
iii. President Jonathan inaugurates the Presidential Task Force on
Power & the Presidential Action Committee on Power to
provide focused leadership of the Reform Agenda.
iv. President Jonathan launches the Nigeria Power Sector Reform
Road map in August 2010.
v. NERC Board reconstituted
ROADMAP IMPACT ON SERVICE DELIVERY

3. .
Since 2010 the change in power generated and delivered has been positive
and gradual. This has been purely based on government efforts.
To achieve the levels of performance that Nigerians are demanding and
expecting the baton of service-delivery has to change from public to private
hands. The Sector needs to be REFORMED.
WHAT IS REFORM?
Reform simply means deregulating the Power industry by moving the sector
from the position of government ownership/management of the assets to a
private-sector driven Nigerian Electricity Supply Industry (NESI) in line with
the EPSR Act 2005.
AIMS OF POWER SECTOR REFORM
 to ensure a system of generation, transmission, distribution and
marketing that is efficient, safe, affordable and cost-reflective
throughout the country;
 to ensure that the power sector attracts private investment both
from Nigeria and from overseas;
 to develop a transparent and effective regulatory framework for the
power sector;
 to develop and enhance indigenous capacity in electric power sector
technology;
 to participate effectively in international power sector activities in
order to promote electric power development in Nigeria, meet the
country’s international obligations and derive maximum benefit from
international cooperation in these areas;
 to ensure that the Government divests its interest in the state-
owned entities and entrenches the key principles of restructuring
and privatization in the electric power sector;
 to promote competition to meet growing demand through the full
liberalization of the electricity market; and
 to review and update electricity laws in conformity with the need to
introduce private sector operation and competition into the sector.
POWER SECTOR ACHIEVEMENTS
1. MYTO2 tariff successfully launched & operational on 01 June 2012
2. Establishment/operationalizing the Nigerian Bulk Trader
3. Provision of FGN Credit Enhancement to the Bulk Trader
4. Operationalizing of Nigerian Electricity Liability Management Company
NELMCO
5. Reconstitution of NERC to strengthen regulatory regime
6. Ensure that power is steady and predictable

4. .
7. Execute privatization of generation & distribution assets
8. Implement a framework to guarantee increase gas supply
9. Implement the Emergency Gas Plan (short term)
10. Significant progress in Power Sector Reform.
11. Significant reduction in the number of partial and total system collapses
12. Transmission network being expanded with provision made for
redundancy; continuous loop
13. Peak Generation of 4,517.6MW (Highest generation ever in the history
of the country)
14. Successful bidders for 10 DisCos & 5 GenCos & payment of 25% of share
sale amounts – fulfilling all conditions prior to the commencement of
negotiations
15. Investors’ confidence evidenced by increased investment & signing of
MOUs
16. Manpower development is being pursued aggressively
17. Ratification of Manitoba Hydro/TCN management contract &
announcement of TCN Board
18. Signing of Labour Agreement
19. Over 1500MW in additional capacity added by NIPP generating assets
20. Zungeru Hydro Electricity Power Plant contract finally awarded after 30
years on the drawing board
REFORM OUTLOOK
On the 5th
of September 2012, Mr. President reconstituted the Presidential
Action Committee on Power (PACP) and the Presidential Task Force on
Power (PTFP). The original terms of reference of the 2010 PTFP which was
essentially to support the Power Sector in driving the Reform Roadmap
targets. PTFP operates from the synergy philosophy of “One Leadership,
One Sector, One Mission”
Milestones delivered
Removing obstacles to private sector investment
 Finalising a cost-reflective tariff
 Establishing government/sovereign credit guarantees
 Enabling a functional bulk trader
 Finalising the settlement system for the market operator
 Simplifying approach for private sector investment
Divestiture of the PHCN successor companies
 Finalising privatisation initiatives in generation and distribution
 Resolving labour issues associated with divestiture
Improving service delivery
 Attaining set targets for generation, gas supply, transmission and
distribution
RELEVANCE OF TRANSACTIONS BEING SIGNED TODAY
The transactions presented today testify to promises made and kept when
the Roadmap was presented by Mr President in 2010. Evidence of the
following will now be presented:
1. The divestiture of all Government owned generation and distribution
companies;
2. The transfer to the private sector of managerial control over the
Transmission Company of Nigeria;
3. The strengthening of the Nigerian Electricity Regulatory Commission
(NERC);
4. The establishment of a credible and appropriate pricing regime with
tariffs set at levels that allow investors to recover their costs;

5. .
5. The establishment of the Bulk Trader (NBET) capable of executing
bankable Power Purchase Agreements (PPAs) with Independent Power
Producers (IPPs);
6. The provision by the Federal Government of Nigeria (FGN) of the credit
enhancement required to ensure the bankability of the first wave of IPP
PPAs;
7. The reform of the fuel-to-power sector;
8. Receipt of privatization proceeds, for the payment or settlement of
labour costs.
INVESTMENT OPPORTUNITIES
Nigeria represents over 65% of the effective West Africa market and remains
the most competitive destination for the establishment of medium and large
manufacturing industries.
• 10 medium-sized generation plants from the National Integrated Power
Project are being scheduled for divestment;
• Major opportunities exist throughout the power value-chain: in gas
production, gas transportation infrastructure, power generation,
transmission and distribution;
• Opportunities are being developed for the arrival of a private-sector led
market: in training, technical services, consulting, metering and collection
services etc.
• Government is presently and actively engaging with off-grid generation
solutions to provide power to rural and remote areas – a ‘power map of
the country is being developed’;
Nigeria’s Power Sector is open for business!!!

6. .
POWER: THE MULTIPLIER EFFECT
INTRODU
CTION
The
Power
sector of
any
nation is
the key
driver of
overall
social and
economic
developm
ent. This
is due to
the
straddling
and cross-cutting importance of power especially electricity to every facet of
human activity. Its relevance as a fulcrum on which all and other activities revolves
around is better appreciated especially in an emerging economy such as Nigeria
where abundance of natural resources and human resources remain largely latent
vis. a vis. the existing potentials.
The development of the power sector is therefore critical to the agricultural & food
–processing sector, manufacturing, employment generation, health, water
resources, education, ICT etc. The optimal development of Nigeria’s power sector
as conceived by the present administration of His Excellency, President Goodluck
Ebele Jonathon will therefore unleash Nigeria into a super highway of rapid and
sustainable industrial growth and social wellbeing of our population. This will
ensure not just the realization of the Vision 20:20 but enable Nigerians to maintain
one of the highest standards of living in the world.
NEW POWER EMPLOYEES
The electric power supply chain through generation, transmission and distribution
creates great opportunities for employment of labour and these opportunities are
projected to increase with more private sector investment for efficient, safe and
reliable power supply. Such opportunities will come directly from the utilities and
indirectly from companies that will be involved with maintenance and servicing of
utilities’ facilities. At present, maintenance and servicing of utilities’ facilities is
usually through direct labour but with demand on the private driven power sector,
there will be need to engage competent companies who will be employers of
labour in all categories.
Company Name Additional Technical Manpower
Required To Sustain Present
Capability
Additional Technical Manpower
Required Due To Increase In
Next 5 Years (NIPP Projects)
Total Additional Manpower
Required
All Host Generation
Companies
909 - 909
All NIPP Generation Stations - 400 400
Transmission Company
(TCN)
1,486 1,672 3,158
All Distribution Companies 5,944 7,030 12,974
TOTAL 8,339 9,102 17,441
Additional technical manpower required for distribution, transmission & generation at present and in next 5
years based on expected expansion in the system
– source National Power Training Institute of Nigeria (NAPTIN) 20121
Alongside the utilities and the service companies, the oil and gas sectors which
supply the fuel for power generation will be expected to expand to accommodate
the growing power demand. In its development, new job opportunities will be
created.
1
This is the manpower deficit arising solely from new capacity added by the Federal
Government and does not include any new capacities planned by the expected new owners
and IPP developers.

7. .
With the present reforms at the minimum the following category of staff will be
needed to infuse new skills and capacities in the sector. Most of these persons will
be gauged in the private sector through the successor companies of the PHCN
(NDPHC) and NIPP. This is without consideration of new IPP projects and potential
investors in other segments of the sector in the years ahead.
NEW TECHNOLOGIES & APPLICATIONS
With a liberalized power sector, and an enabling environment, private investors will
seek competitive means of providing power supply. Independent Power Producers
may resolve power generation from renewable energy sources where and when
there is a comparative advantage. It is becoming increasingly cost-effective to
supply remote areas, rural areas with difficult terrain, and areas far from the grid
with distributed generation from renewable energy sources and off-grids solutions.
Recent examples include: Gembu plateau in Taraba State – about 300km from the
grid across very difficult terrain, Obudu hills and Eburutu Communities in Cross
River State, and Ibedu Ibiakot Communities in Akwa Ibom.
Renewable energies especially biomass, or waste-to-energy usually have a long
chain of activities that cuts across several sectors making them more labour-
intensive than conventional energy generation methods. Being multi-sectorial,
renewable energy promises greater job opportunities when compared to the
conventional sources, it incentivizes agriculture through the re-use of agricultural
waste for power, and enhances municipal solid waste management. Other
renewables such as small hydropower and solar photo-voltaic (PV) power will
create jobs at the communities where they are deployed. It is estimated that during
the construction of a 1-2MW solar PV nearly 40 persons are employed. This
number increases by approximately 15 persons for every additional 1MW capacity.
In the case of Concentrated Solar Power (CSP) systems, up to 500 personnel would
be typically employed in the construction of a 20MW capacity project.
POWER & INDUSTRIES
The industrial sector which is one of the engines for economic development
completely relies on the availability of adequate power supply. Economic
indicators have shown a declining contribution from the productive sector to the
Nigerian’s Gross Domestic Product (GDP) for decades, aside from crude oil export.
Manufacturing which should ordinarily form the bedrock of industrialization
contributed less than five percent to the pool while crude oil and gas contributed
95%.
Government has further demonstrated its commitment to quickly revitalize the
industrial base by providing proper and adequate laws to enhance investment
strategies policies for private sector to participate in the Nigerian power sector.
These will provide employment opportunities, reduce costs and prices, increase
skills development, help in the utilization of resources and provide more foreign
earnings into the country.
According to the United Nations statistics, Nigeria is the 7th
largest country in the
world. With a population of 160 Million – half the population of West Africa, 15% of
the population of the African continent – she is expected to reach 230 million
people in 20 years. With adequate provision of power supply she will be the hub of
industrialization within the ECOWAS region. The unique human resources, vast
amount of natural resources, untapped solid mineral resources amongst other
great potentials have convinced the government to transform the power sector and
to re-position Nigeria into one of the top 20 economies by 2020.
POWER & ICT/TELECOMMUNICATIONS
Inadequate power supply which leads to high cost of maintenance of generators
and fueling is one of the problem facing telecommunication operators.
Government is determined to reduce the operation cost of the
ICT/Telecommunication providers by tackling power problems in order to have
improved and quality telecommunication services to allow the country and her
citizens to benefit from the productivity gains in a world driven increasingly by data
and information.

8. .
POWER AND AGRICULTURE
Agriculture has a dual role as a major energy consumer and as an energy supplier in
the form of bioenergy. Agriculture offers important rural development
opportunities; it assists climate change mitigation by substituting bioenergy for
fossil fuels. The World Bank has proposed a greater focus on rural energy in its
lending portfolios for the energy sector, and is planning to bring renewable energy
considerations more prominently into non-power sector lending, such as in the
agriculture sector (World Bank, 1999)
Any efforts to increase access to power and generation will assist Nigeria in
meeting its energy requirements for agriculture, forestry and fisheries and thereby
achieve sustainable development. A transition from the present energy mix of
mainly wood fuel, animal and human work, to a more diversified supply utilising
modern energy technologies will be key to improving the living conditions of rural
populations.
One major benefit of providing electricity to the agriculture sector is that it can
achieve a lower cost of fertilizer production. Other benefits are:
 An increase in the number of fertilizer production companies in
Nigeria (both foreign and domestic).
 Further incentives to engage in fertilizer production in all states of
Nigeria.
 Significant reduction in price of fertilizer; thereby ensuring
availability to even the lowest income farmers and availability of
food for all.
 Job creation as a result of increase in fertilizer production
companies in Nigeria.
 Solve the age long problem of fertilizer importation in Nigeria by
reducing significantly the cost of domestic production.
Improving energy services for rural people will also increase the energy used for
agriculture providing productivity gains, enhanced food security and rural economic
development. The agriculture sector’s capacity for production of biomass,
agriculture is also a potential source of renewable energy supply, creating a major
opportunity for agriculture to play an important role in sustainable energy
development.
POWER AND EDUCATION
Apart from providing necessary technical back-stopping and increased scholarship
for continuous sustenance of the energy sector, education plays other vital roles.
Knowledge gaps which exist within the energy sector could be bridged through
education. Specifically the role of Information and Communication Technology (ICT)
to achieve this can never be overemphasized. Energy sources (like electricity) play a
crucial role in the development and use of ICT in striving to achieve sustainable
development in emerging economies. The volume of information available as a
result of ICT for all to harness seems endless. Although electrical energy is
intrinsically linked to economic, environment and social dimensions of sustainable
development, this has been reduced due to current challenges within countries
with electricity generation. Researchers perceive strategies for promoting solar
power generation for increased access to ICT by people will be beneficial to the
education sector.
In Nigeria, as part of a government initiative to promote ICT scholarship in schools
and other education centers, the number of computers (without access to internet)
has increased significantly while inability to access the internet has been blamed on
power sources. Additionally an investment in the power sector will inevitably
create a better learning environment for students and lower the costs institutions
spend on its operations.
POWER AND SME’S
According to the World Bank Enterprise Survey, electricity is considered by far the
most importance hindrance to businesses in Sub-Saharan Africa. Small and medium
businesses play a key role in driving the economy of Nigeria and stable power supply
is very critical to the survival of such businesses.
In order to improve access to electricity, large investments have to be made in
electricity production and transmission. Better regulation and public purchase

9. .
agreements must be put in place in order to boost investment. When such
regulations are in place, investments in electricity production in Nigeria would
improve the business environment significantly since access to electricity is
considered their most important obstacle to business activities.
The local barbers, welders, milling workers and many more industries would be
instantly and positively affected by a boost to electricity supply. Where there is no
power supply, these workers currently operate on a generator which inevitably
consumes a significant portion of their income. The domestic rice industry offers
huge potential to Nigeria, yet rice is currently imported cheaper as electricity costs
have increased the price of the good. Increased power can re-vitalise this and other
industries.
Poor power quality and reliability have their own costs. In addition to high prices
from self-generation, unpredictable outages represent a serious problem for
businesses in Sub-Saharan Africa. According to a Youpes et al (2008) study on Sub-
Saharan Africa estimates indicate that annual GDP growth would have been 1-2
percentage points higher if access to electricity had been more stable. It is necessary
to maintain the momentum of reform to guarantee success.
INTRODUCTION TO NIPP
The National Integrated Power Project (NIPP) was conceived in 2004 as a
fast-track government funded initiative to stabilize Nigeria’s electricity
supply system while the private sector led structure of the Electric Power
Reform Act (EPRSA) of 2005 took effect.
NIPP was originally designed around seven medium sized gas fired power
stations in the gas producing states and the critical transmission
infrastructure needed to evacuate the added power into the national grid.
A commitment to electrify host communities in the vicinity of the power
stations and major substations gave rise to the distribution component of
the project.
In August 2005, the National Council of State and National Assembly
approved an initial funding of US$2.5 billion for NIPP from the “Excess
Crude Oil Account” (ECOA) which statutorily belongs to the Federal, state,
and local governments. The Federal Government therefore incorporated
Niger Delta Holding Company Limited (NDPHC) as a limited liability
company to serve as the legal vehicle to hold the NIPP assets using
private sector-oriented best business practices.
In January 2009, the National Economic Council (NEC) inaugurated the
NIPP Steering Council chaired by the then Vice President Dr. Goodluck
Ebele Jonathan, with six state governors and four Federal ministers as
members.
The NIPP Steering Council is now the Board of Directors of NDPHC chaired
by Vice President Mohammed Namadi Sambo.

10. .
INTRODUCTION TO NDPHC
The NDPHC is a corporation registered by law as a Special Intervention
Vehicle (SIV) designed to inject massive and accelerated investments in
the power sector along efficient private sector models under the aegis of
National Integrated Power Projects (NIPP) to fast-track capacity
improvement in the power sector. Accordingly the NIPP originally
conceptualized to undertake mostly generation (gas-fired) projects, had
to stretch its ambit to include a wide range of transmission and
distribution upgrade projects in order to address years of under-
investment and the resultant capacity gaps in the sector. Its mission can
be summarized as follows: to increase generation, ensure proper
alignment between the three segments – Generation, Transmission and
Distribution – to avoid stranded generation, and improve grid efficiency
and reliability.
The NDPHC is jointly owned by the three tiers of Government and its
board is chaired by the Vice President of the Federal Republic of Nigeria.
In terms of planned contribution to the national grid, the NIPP generation
projects have been targeted to add a total of 4774 MW from 10
generation plants each set up as wholly-owned subsidiaries of NDPHC.
These plants are now to be divested.
GENERATION ASSETS:
1. The transaction to be structured as a sale of shares with NDPHC
retaining 20% equity stake in project companies.
2. The transaction to be undertaken through a single process, completing
the sale of each asset after it has been commissioned.
3. A limit will be placed on the amount of the installed generating
capacity any one bidder/ consortium can own. Amount is to be
determined by NERC.
NIPP POWER PLANTS
Plant Location Gas
Turbines
Steam
Turbines
Capacity
Alaoji Abia State 4 2 961
Calabar Cross River
State
5 0 561
Egbema Imo State 3 0 338
Gbarain Bayelsa State 2 0 225
Geregu Kogi State 3 0 434
Ihovbor Edo State 4 0 451
Olorunsogo Ogun State 4 2 676
Omoku Rivers State 2 0 225
Omotosho Ondo State 4 0 451
Sapele Delta State 4 0 451
Totals 35 4 4,774

11. .
TRANSACTION TIMELINE
Task Proposed Date
Invitation of Expression of Interest April 8, 2013
Investor Road Shows May 8- June 4, 2013
Submission of Expression of Interest June 28, 2013
Short Listing of Bidders July 19, 2013
Availability of RFP and Transaction
Documents for Short Listed Bidders July 26,2013
Opening of Data Rooms July 26, 2013
Bidder Due Diligence July 26 - November 1, 2013
Final Comments on Industry Agreements
and Preliminary Comments on Transaction
Agreements and RfP August 23, 2013
Transaction Review Conference September 9-10 2013
Distribution of Final Industry Agreements September 20, 2013
Final Bidder Comments on Transaction
Agreements and RfP September 27, 2013
Distribution of Final Bid Documents October 11, 2013
Deadline for Submission of Proposals November 8, 2013
Completion of Evaluation of Technical Bids November 29, 2013
Financial Bid Opening December 6, 2013
Announcement of Preferred Bidders January 17, 2014
Submission of Preferred Bidders' Guarantee February 7, 2014
Commencement of Negotiations March 3, 2014
Execution of Agreements April 18, 2014
Handover of Assets June 16, 2014
For more details and to register, please go to http://www.nipptransaction.com/
1. Expression of Interest
The purpose of the Expression of Interest stage is for bidders to prequalify to progress to the
second stage of the process, at the end of which they will submit their bids to acquire the
majority stakes in the generation companies.
Parties interested in submitting Expressions of Interest should register on the Registration for
Expression of Interest page, following which they will be issued with an Information
Memorandum providing further details of the transaction and the NIPP power generation
assets, together with Pre-Qualification Instructions and Criteria.
In the Expression of Interest phase, bidders will be asked to indicate which companies they
are interested in and to describe and provide documentary evidence on their competencies.
Bidders that are approved by NDPHC based on their Expression of Interest submissions will
be considered as pre-qualified bidders.
2. Roadshow Events
A Roadshow Event will be held in Lagos, London, New York and Hong Kong throughout May
and in early June 2013, during the Expression of Interest stage of the process. The purpose of
this Roadshow Event is to introduce the transaction to interested parties and answer
questions about the assets and the transaction process.
Please refer to the Roadshow Events Registration page to register online to attend the
Roadshow Events in one or more locations.
3. Bid Documents
Bid documents will be issued to the pre-qualified bidders. These documents will include a
Request for Proposals and agreements, including transaction agreements and industry
agreements to be entered into by the generation companies, for, inter alia, the supply of
natural gas and the purchase of electricity generated.
4. Data Rooms
An online data room will be established and managed where information including bid
documents and background materials will be uploaded for review and download by pre-
qualified bidders. A physical data room will also be established in Abuja for pre-qualified
bidders that wish to use it.
5. Site Visits
Pre-qualified bidders will be offered the opportunity to visit the sites of the power plants in
which they are interested.
6. Transaction Review Conference

12. .
A Transaction Review Conference will be held in Abuja in September 2013, the purpose of
which is to answer pre-qualified bidders’ questions on the assets, the process and the
agreements, and address any other outstanding issues.
7. Bid Evaluation Process
The process for the bid evaluation will contain two steps:
 Technical Bid Evaluation – Bidders’ technical capabilities will be evaluated
against criteria advised at the start of the Request for Proposals stage of the process.
The financial/commercial bids of bidders who do not pass the technical bid evaluation
phase will be returned unopened.
 Financial/Commercial Bid Evaluation – The financial/commercial bids of those bidders
passing the technical bid evaluation phase will then be opened for evaluation against
criteria advised to pre-qualified bidders at the start of the Request for Proposals stage of
the process.
8. Execution of Agreements
NDPHC and the successful bidders will execute the transaction agreements as a part of the
closing process for the transactions.