NIGERIA POWER SECTOR PROGRAM QUARTERLY PROGRESS …

NIGERIA POWER SECTOR PROGRAM QUARTERLY PROGRESS REPORT January 1, 2019–March 31, 2019

DISCLAIMER: Deloitte Consulting LLP prepared this publication for review by the United States Agency for International Development. The author’s views expressed in this publication do not necessarily reflect the views of the United States Agency for International Development or the United States Government.

NIGERIA POWER SECTOR PROGRAM (NPSP)

QUARTERLY PROGRESS REPORT IDIQ Contract No. 720-674-18-D-00003 Power Africa Extension (PAE)

Task Order No. 720-674-18-F-00003 Nigeria Power Sector Program (NPSP)

USAID | Southern Africa

Contracting Officer’s Representative: Edward La Farge

ACKNOWLEDGEMENT: Deloitte Consulting LLP produced this document for review by the United States Agency for International Development. It was prepared under Task Order No. 01: The Nigeria Power Sector Reform Program (the “Task Order”) of the Power Africa Indefinite Delivery, Indefinite Quantity (“IDIQ”) Contract No. 720-674-18-D-00003 implemented by Deloitte Consulting LLP.

NPSP QUARTERLY PROGRESS REPORT (Q2 FY19) 3

ACRONYMS

Acronym Definition AEDC Abuja Electricity Distribution Company AFC Africa Finance Corporation AFD Agence Française de Développement (AFD) funds AfDB African Development Bank AKK Ajaokuta-Kaduna-Kano Pipeline ANED Association of Nigerian Electricity Distributors APC All Progressives Congress APGC Association of Power Generation Companies APUA Association of Power Utilities in Africa ARE Alliance for Rural Electrification BPE Bureau of Public Enterprises CBN Central Bank of Nigeria CEO Chief Executive Officer CODIFOR Cooperation, Industrial Development and Training COR Contracting Officer’s Representative CPCS Canadian Pacific Consulting Services DG Director General DISCOs Distribution Companies EC Eligible Customer EEI Energizing Economies Initiative EIA Environmental Impact Assessment EKEDC Eko Electricity Distribution Company EMMP Environmental Mitigation and Monitoring Plan EMRC Energy Market and Regulatory Consultants ESMAP Energy Sector Management Assistance Program FGN Federal Government of Nigeria FX Foreign Exchange GCA Grid Connection Agreement GCF Green Climate Fund GENCO Generation Company GIZ Deutsche Gesellschaft fur Internationale Zusammenarbeit GSA Gas Supply Agreement GSAA Gas Supply and Aggregation Agreement GSAP Gender and Social Inclusion Action Plan ICRC Infrastructure Concession Regulatory Commission ICT Information and Communications Technologies IDIQ Indefinite Delivery/Indefinite Quantity IFC International Finance Corporation IHP Integrated Health Program IOC International Oil Company IPP Independent Power Producer JICA Japan International Cooperation Agency JTC Joint Transaction Committee KPIs Key Performance Indicators LNG Liquid Natural Gas


Acronym Definition MAN Manufacturers Association of Nigeria MAP Meter Asset Providers MAS Mini-Grid Acceleration Scheme MD Managing Director MDAs Ministries, Departments and Agencies ME&L Monitoring, Evaluation & Learning MFB Microfinance Bank MFI Microfinance Institution MoF Ministry of Finance MOU Memorandum of Understanding MoPWH Ministry of Power, Works and Housing MW Megawatts MPR Ministry of Petroleum Resources MYTO Multi-Year Tariff Order NARUC National Association of Regulatory Utility Commissioners NBET Nigerian Bulk Electricity Trading Company NDA Non-Disclosure Agreement NDPHC Niger Delta Power Holding Company NEP Nigerian Electrification Program NEMSF Nigeria Electricity Market Stabilization Facility NERC Nigerian Electricity Regulatory Commission NESP Nigerian Energy Support Program NGFCP Nigerian Gas Flare Commercialization Program NIPP Nigerian National Integrated Power Project NPSP Nigeria Power Sector Program NREEE National Renewable Energy and Energy Efficiency Policy PATRP Power Africa Transactions and Reforms Program PATT Power Africa Transaction Tracker PCOA Put/Call Option Agreement PDP People’s Democratic Party PIB Petroleum Industry Bill PIP Performance Improvement Plan PMU Project Management Unit PPAs Power Purchase Agreements PRG Partial Risk Guarantee REA Rural Electrification Agency REF Rural Electrification Fund (Division of REA) RFP Request for Proposals RFQ Request for Qualifications SANEF Shared Agent Network Expansion Facility SHS Solar Home System SOGE Scaling Off Grid Energy SOQ Statement of Qualifications SSA Share Sales Agreement TCN Transmission Company of Nigeria TORs Terms of Reference TREP I Transmission Rehabilitation and Expansion Program


Acronym Definition USADF United States African Development Foundation USAID United States Agency for International Development WASH Water, Sanitation, and Hygiene


TABLE OF CONTENTS ACRONYMS .................................................................................................................................... 3

PROJECT INTRODUCTION....................................................................................................... 7

EXECUTIVE SUMMARY ................................................................................................................ 8

PROJECT HIGHLIGHTS ............................................................................................................... 9

PROGRESS OF ACTIVITIES BY TECHNICAL AREA ......................................................... 15

ENERGY RESOURCES: GAS SUPPLY ............................................................................................................ 16

ON-GRID GENERATION................................................................................................................................. 20

OFF-GRID GENERATION ................................................................................................................................ 28

TRANSMISSION .................................................................................................................................................. 39

DISTRIBUTION .................................................................................................................................................... 42

ENABLING ENVIRONMENT ........................................................................................................................... 48

CROSSCUTTING ACTIVITIES ........................................................................................................................ 52

FINANCE AND ADMINISTRATION ..................................................................................... 62

OPERATIONS ...................................................................................................................................................... 62

PROJECT STAFFING .......................................................................................................................................... 62

SUBCONTRACTS ............................................................................................................................................... 62

APPENDIX A: NPSP ORGANIZATIONAL CHART........................................................... 63

APPENDIX B: TECHNICAL DELIVERABLES SUBMITTED OVER QUARTER ............. 64

APPENDIX C: SUMMARY OF TECHNICAL CHALLENGES ........................................... 67

APPENDIX D: YEAR 1 WORKPLAN TABLES ..................................................................... 69


PROJECT INTRODUCTION

Since the 2013 launch of Power Africa, USAID and other US government agencies have worked across the continent to increase the number of people with access to power. The Nigeria Power Sector Program (NPSP) is Power Africa’s signature program in Nigeria, and supports comprehensive power sector reform, a strengthened enabling environment, and increased private-sector investment as critical pillars to improving Nigeria’s access to affordable, reliable power.

Nigeria’s power sector faces many challenges. Distribution companies (DISCOs) struggle to make the capital investments in network improvement and infrastructure necessary to be able to provide reliable electricity service to customers. The Transmission Company of Nigeria’s (TCN) planned expansion of grid capacity from its present 7,000 MW to 20,000 MW by 2020 will require an estimated US$8 billion in investment. The power sector regulator faces significant challenges in regulating an evolving market structure that experienced both unbundling and rapid privatization in the same decade.

To address these challenges, Power Africa launched the Nigeria Power Sector Program in April 2018. The project employs a flexible approach to develop, deploy, evaluate, and sustain a variety of interventions and activities responding to Nigeria’s critical needs and the broader economic, political, and social developments of the power sector throughout the next five years.

NPSP will increase electricity availability, access, and reliability throughout Nigeria, while measuring objective progress across the following thematic technical areas:

• Generation: Increased private-sector investment

• Gas: Improved supply to meet national demand for the power sector

• Transmission: Increased grid stability, improved planning capacity, and overall service expansion

• Distribution: Improved distribution performance and greater liquidity throughout the energy sector

• Off-Grid: New off-grid connections to cleaner power supply

• Enabling Environment: Improved enabling environment for private-sector participation in the power sector

• Crosscutting: Emphasizing stakeholder coordination, gender and social inclusion, community engagement, and environmental principles across the sector

This document serves as the NPSP Fiscal Year 2019 (FY19) Quarter 2 (Q2) Progress Report, covering notable progress and events in these technical areas during January 1, 2019–March 31, 2019. This report is organized into three main sections: Project Highlights, Progress of Activities by Technical Area, and Finance and Administration. Each technical area contains the interventions defined in the NPSP Year 1 Workplan, and includes a discussion of successes/lessons learned, as well as challenges to achieving results.


EXECUTIVE SUMMARY

The Nigeria Power Sector Program (NPSP) continued establishing program activities with Nigerian counterparts and successfully moved toward program objectives in Q2 of FY19, despite significant events, such as the presidential and gubernatorial elections held in late February. Highlights of NPSP’s Q2 results include:

• 6,142 connections resulting from NPSP’s support to mini-grid and solar home system (SHS) companies, such as assisting Azuri Technologies (SHS) with strategy and distribution network development.

• 17 off-grid companies actively supported over the past quarter. NPSP provided investment facilitation, strategy development, financial modeling support, and other technical assistance to these Power Africa-approved companies.

• 24 people at the Abuja Electricity Distribution Company (AEDC) participated in a technical workshop facilitated by NPSP’s Distribution Team.

NPSP also made progress in providing technical assistance and executing the following program activities:

• Launched the Women’s Leadership Group, co-hosted a workshop, “Amplifying Gender in the Energy Sector” with the Rural Electrification Agency, and completed a gender mainstreaming photography initiative.

• NPSP’s Path to Impact Team quantified and prioritized NPSP technical interventions and will hold a donor workshop in early April 2019.

• Submitted twenty technical deliverables for USAID/Power Africa to review, including NPSP’s End-to-End Sector Assessments.

NPSP resubmitted revised drafts of two deliverables to USAID: The ME&L plan and the Environmental Mitigation and Monitoring plan (EMMP). NPSP anticipates USAID will approve both deliverables in the beginning of Q3.

Presidential Elections

On February 23, 2019, Nigeria held presidential elections, allowing the public to vote between incumbent President Muhammadu Buhari, of the All Progressives Congress (APC), or Atiku Abubakar, a former vice president and representative for the People’s Democratic Party (PDP). Although minor parties also nominated candidates for consideration, Buhari and Abubakar were the primary candidates. Four days after the elections, the Federal Government of Nigeria (FGN) called the vote in favor of Buhari. The elections were mostly peaceful, although both primary parties traded allegations of fraudulent behavior.


PROJECT HIGHLIGHTS

Notable technical progress and events over the past quarter for the Nigeria Power Sector Program (NPSP) are as follows:

Solar Sister’s Entrepreneurial Workshop

NPSP’s Off-Grid Advisor, Ms. Eme Kponu, attended Solar Sister’s annual Entrepreneurial Workshop hosted on January 18, 2018, in Abuja, Nigeria. Solar Sister is a non-profit organization that provides women with economic opportunity, training, technology, and support to distribute clean energy products and solutions to underserved communities in Africa.

Ms. Kponu spoke to female participants about the importance of sustainable energy, particularly solar energy, and encouraged them to take advantage of the Solar Sister’s program, which can help them become entrepreneurs and distributors of solar lamps. More than 20 participants attended the presentation where they learned about the benefits of clean energy and received encouragement to be a key part of the solution to the clean energy challenge.

NPSP Workshop: Guiding Program for Results

On January 25, 2019, NPSP’s Path to Impact Team held a workshop for both NPSP team members and close partners in Abuja to present some of their initial findings and solicit feedback from the group regarding those findings. These included aligning on a Theory of Change for the Nigerian energy sector, ranking potential NPSP technical interventions, and discussing the reprioritization of NPSP’s current technical interventions. Some of the recommendations from the workshop included focusing on strengthening the regulatory environment and the DISCOs, a greater emphasis on integrated planning and system-wide stabilization, and accounting for the interrelationships between on- and off-grid investments.

The Path to Impact Team updated their Theory of Change and suggested portfolio of technical interventions because of the workshop. NPSP anticipates convening donors and external stakeholders in the following quarter to create alignment on the Theory of Change and develop partnership opportunities to drive critical change in the sector.

Figure 1: NPSP's Off-Grid Advisor presents to attendees of the Solar Sister's Entrepreneur Workshop in Abuja

Figure 2: Participants in focused discussion at NPSP's Guiding Program for Results Workshop


NESP Workshop for Mini-grid Acceleration Scheme (MAS)

The Nigeria Energy Support Program (NESP), a European Union-funded program implemented by Deutsche Gesellschaft fur Internationale Zusammenarbeit (GIZ), invited NPSP’s Off-Grid Lead, Mr. M.K. Balaji, to speak at their Workshop for Mini-Grid Developers held on January 30, 2019, in Abuja, Nigeria. The workshop served to memorialize the launch of NESP’s Mini-grid Acceleration Scheme, which includes a €6 million grant-in-kind program administered by the Rural Electrification Agency’s (REA) Rural Electrification Funds (REF) division. REA Managing Director Damilola Ogunbiyi as well as REF Executive Director Dr. Sanusi Ohaire attended the workshop, which provided participants with the selection criteria required to apply for program funding.

Mr. Balaji delivered a presentation introducing NPSP to the audience and outlining NPSP’s support areas for the Mini-grid Acceleration Program. NPSP is supporting the program in two critical areas: first, through developing a grant administration platform through Odyssey to support REA’s management of the grants; and second, through providing technical assistance to the project developers interested in

participating in the program. REA’s official twitter account covered the event, including a group photo of key leadership at the event, including (left to right in the photo above) Engineer Mohammad Wasaram, REA’s Executive Director of Technical Services; Ms. Ina Hommers, GIZ’s Head of NESP; Dr. Ohaire; Ms. Ogunbiyi, and Mr. Balaji.

Launch of the Women’s Leadership Group

NPSP launched the Women’s Leadership Group through an inaugural meeting on February 4, 2019, in Abuja, Nigeria. NPSP designed this group to create a forum for women in leadership positions throughout Nigeria’s energy sector to provide advisory feedback on NPSP’s programmatic initiatives and to bolster support for gender and social inclusion in the sector.

Ms. Whitney Jensen, Gender Advisor and Deputy Director of USAID Nigeria’s Program Office, delivered opening remarks to the group, which included senior-level participants from government agencies such as the REA and the Nigerian Bulk Electricity Trader (NBET); international donors such as GIZ, the United Nations, and the World Bank; and leading non-profit organizations including Solar Sisters, Power for All, and the WAAW Foundation.

Following Ms. Jensen’s opening remarks, NPSP’s Events Coordinator, Ms. Mimi Ogunbowale, presented NPSP’s Gender and Social Inclusion Plan to the audience, which includes NPSP’s design to incorporate

Figure 3: REA Tweet, including NPSP’s Off-Grid Lead with REA's Managing Director and other leadership

Figure 4: NPSP's Ms. Mimi Ogunbowale preparing to present at the meeting


purposeful inclusion principles into our technical programming. NPSP’s Gender Advisor, Ms. Jenine Jaradat, facilitated feedback from the audience following this presentation; based on the recommendations from the meeting, NPSP is developing a country-wide database for women involved in the sector. NPSP plans to convene the next meeting of the Women’s Leadership Group in the following quarter.

Amplifying Gender in the Energy Sector

On February 5, 2019, NPSP and REA co-sponsored a milestone workshop titled Amplifying Gender in the Energy Sector. The workshop brought together around 70 female energy sector professionals to discuss challenges, identify opportunities and make recommendations for the way forward.

NPSP and REA have pledged to support some of the workshop recommendations which included a database of women in the sector, a mailing list for the exchange of ideas and opportunities, networking events, professional development training, and technical support to female business owners.

As seen in the figure below, 55 attendees participated in an electronically administered baseline survey capturing data on areas of competence, networks, gender discrimination in the workforce, and access to capacity building and mentorship opportunities.

Figure 6. Baseline Survey Results

Figure 5: Female energy sector professionals listening at the workshop


Quarterly Off-Grid Stakeholders Meeting

On February 6, 2019, NPSP cohosted the Quarterly Off-Grid Stakeholders Meeting with local investment non-profit, All On, which co-chairs the group. The meeting acts as a forum to convene donor agencies, impact investors, and development financial institutions to foster collaboration among the different stakeholders. This quarter’s meeting focused on convening donors and investors, primarily to cover several exciting new programs and to highlight natural collaboration points among the participants. Representatives from all the key donor programs in the off-grid space were present. In addition, NPSP invited two US firms to present their solutions for the off-grid sector: Tesla and Odyssey. Among other topics, the attendees discussed the funding available in the sector, especially for donor programs, such as Nigerian Electrification Program (NEP), and how developers can plug into these investments.

Powering Africa: Summit 2019 and Investor Breakfast

NPSP’s Deputy Chief of Party, Mr. Tunde Gbajumo, and Energy Analyst, Cole Johnson, represented NPSP at the 5th Powering Africa: Summit (PAS) held in Miami from February 25 to 27, 2019. The summit convened more than 370 investors from across North America, Africa, and Europe to present energy projects, discuss investment opportunities, and build relationships within the international power community. Agenda topics at the summit included US policy on Africa, gas policies and generation, and off-grid energy access.

Figure 8. Powering Africa Summit Invitation

NPSP’s participation included meetings with a host of developers and investors with experience and/or interest in developing and investing in off-grid energy projects in Nigeria. At the summit, NPSP also hosted a breakfast event at the Powering Africa Summit that brought together senior Federal Government of Nigeria (FGN) officials, key donor partners, potential investors, and implementing partners for an informal set of discussions on how we can move the sector forward and best respond to the outcomes of the February presidential elections. The Off-Grid Team conducted pre-arranged meetings with several

Figure 7: Participants at the February Off-Grid Stakeholder's Meeting


investors to showcase the opportunities in the sector as a continuation of the program’s cooperation with other donor programs, including the World Bank’s NEP, the European Union’s Nigerian NESP Mini-grid Acceleration Program implemented by GIZ, and REA’s Energizing Economies Initiative (EEI).

Power Solutions on Nigeria Info FM (99.3)

On Monday, March 25, 2019, NPSP’s Deputy Chief of Party, Mr. Tunde Gbajumo, was a radio show guest with All-On’s CEO, Dr. Wiebe Boer. Hosted on Nigeria Info FM (99.3), the show aimed to increase public awareness of the off-grid power sector in Nigeria, specifically focusing on the renewable energy space and promoting the profile of key actors in the industry.

Mr. Gbajumo spoke about his experience in the sector and about NPSP’s work throughout the power value chain during the 30-minute radio show. As a result, listeners had a better understanding of NPSP and called in to ask questions, such as if there is training for solar installations.

United States Consulate: Journalist Seminar

On March 26, 2019, NPSP presented at a Journalist Seminar hosted by the U.S. Consulate in Lagos, Nigeria. Approximately 25 reporters from print and electronic outlets attended the seminar, which aimed to improve their understanding – and therefore reporting – of the power sector in Nigeria. The U.S. Consulate’s Public Affairs section regularly organizes training workshops for journalists and invited NPSP to participate to this session educating Lagos reporters on how to accurately report on energy issues.

Public Affairs Officer Mr. Russell Brooks delivered welcoming remarks while NPSP’s Deputy Chief of Party, Mr. Tunde Gbajumo, provided an overview of the history, challenges, and issues facing the Nigerian power sector, as well as an introduction to NPSP’s program and goals. Mr. Gbajumo provided the journalists with important information about the power sector in Nigeria, as well as presented them with key facts and figures, such as the percentage of Nigerians living without electricity and gave an estimated number of megawatts needed for Nigeria to have constant electricity. He also informed them about the power gaps and issues in Nigeria and how NPSP is helping address these issues.

Off-Grid Advisor Ms. Eme Kponu also presented regarding NPSP’s off-grid program component and relevant focal activities. As a result, the journalists received vital information on the energy sector; NPSP also provided contact information for key NPSP staff in case they required more information in the future.

Technical Workshop with Abuja Electricity Distribution Company (AEDC)

On Thursday, March 28, 2019, NPSP held a workshop at Abuja Electricity Distribution Company’s (AEDC’s) training center titled ‘AEDC Affinity Exercise for Capacity Building.’ Attendees included a broad range of AEDC

Figure 9: NPSP DCOP on Nigeria Info FM (99.3)

Figure 10: Group photo of participants at the U.S. Consulate's Journalist Seminar


employees from diverse service backgrounds, roles, and levels who gathered for the half-day training delivered by NPSP’s Distribution Team.

The purpose of the workshop was to gather input from a broad spectrum of participants on their understanding and ideas regarding capacity building, and to raise awareness of the scope of capacity building as compared against general training, and identify capacity building needs, training needs, and gaps for intervention.

Small group work resulted in their definition of capacity building:

“…is the process by which an individual or organization gains skills and knowledge needed to maximize overall efficiency”

An ‘Affinity Exercise’ followed – using sticky notes, individuals posted capacity building suggestions, and then the group clustered the notes into themes and identified specific follow-up activities and training needs. Participants were quickly engaged, actively participated, and contributed to some lively discussion.

Findings from the workshop in terms of capacity areas will help to identify and validate NPSP capacity building opportunities, while also securing greater buy-in from AEDC due to their active participation in the exercise. NPSP will repeat the workshop with Eko and Ikeja DISCOs in the following quarter, providing an opportunity to find correlations resulting in replicable, sustainable opportunities for intervention.

Figure 11: Participants from the NPSP-AEDC capacity building workshop


PROGRESS OF ACTIVITIES BY TECHNICAL AREA

The Nigeria Power Sector Program (NPSP) defined its technical interventions to specifically address critical shortcomings and challenges facing Nigeria’s power sector. This report structures those activities by the thematic technical areas illustrated in the graphic above, as follows:

• Energy Resources: NPSP gas supply interventions

• Generation: NPSP on-grid interventions

• Generation: NPSP off-grid interventions

• Transmission: NPSP transmission interventions

• Distribution: NPSP distribution interventions

• Enabling Environment: NPSP enabling environment interventions

This report divides each section into four primary discussion areas: technical context, progress against the workplan, successes and lessons learned, and challenges to achieving results. Within the workplan progress component, this report references the interventions listed in NPSP’s Year 1 Workplan, as well as their numbering within that document.

T r a n s m i s s i o n D i s t r i b u t i o nG e n e r a t i o nE n e r g y R e s o u r c e s

O n - G r i d O f f - G r i d O n - G r i d O f f - G r i d

E n a b l i n g E n v i r o n m e n t


ENERGY RESOURCES: GAS SUPPLY

Technical Context

Nigeria has produced natural gas with oil from the Niger Delta region since oil production first began in the country in 1958. Despite an emphasis on oil exploration and production, Nigeria has discovered an estimated 184 trillion cubic feet of gas reserves, that with gas-targeted exploration could reach as high as 600 trillion cubic feet.

The primary route to monetization of gas within Nigeria is the power sector, composed of roughly 85% gas-fired power generation. However, even with an apparent abundance of gas resources, electricity access in Nigeria is severely constrained due to the lack of liquidity in the gas-to-power chain. Insufficient funds flowing back to the generation companies (GENCOs) and gas suppliers, due to poor collection of electricity invoices by distribution companies (DISCOs), is a leading cause for this lack of liquidity.

The lack of active and bankable gas supply agreements in Nigeria is one of the most critical causes of this issue because most gas delivered is on a “best endeavor” basis, with no ability to enforce contractual obligations. NPSP is working to both clearly define the issues behind activating gas supply agreements in Nigeria and to identify solutions to support power sector development through improved reliability in gas supply.

Another key technical issue for gas supply is the lack of a comprehensive domestic transportation pipeline and processing network. Nigeria currently only has two main pipeline systems, one in the East and one in the West, leaving Northern Nigeria completely disconnected. This lack of gas supply to the North has resulted in an exodus of industries previously operating there, further contributing to the overall civil unrest and limited economic development in the region. NPSP is currently tracking the proposed 614-km Ajaokuta-Kaduna-Kano (AKK) pipeline, which will be complete in two years according to the Nigerian National Petroleum Corporation. The pipeline will provide gas to the northern region’s major load

centers, such as Kano, to fuel power generation for industrial parks and commercial entities, and potentially to export to neighboring countries. However, delays in the pipeline’s construction are likely.

International oil companies own and operate much of the gas-processing infrastructure in Nigeria to supply export facilities. This contributes to the limited number of entry points into the national pipeline network and reduces metering opportunities. Lack of domestic gas processing infrastructure is also a cause of operational issues related to power generators receiving off-spec gas that can be harmful to equipment. Ultimately, resolving liquidity issues in the power sector will be the largest catalyst for infrastructure development because it will strengthen the business case for proposed projects (e.g., AKK) and incentivize investment.


Progress Against the Workplan

NPSP has continued to support the Nigerian Gas Flare Commercialization Program (NGFCP), the mechanism for implementing Nigeria’s commitment to eliminate routine gas flaring and largest program of its kind undertaken globally. FGN approved the program in 2016, which lays out the framework to effectively commercialize gas that companies would otherwise flare. The subsequent ratification of the Flare Gas (Prevention of Waste and Pollution) Regulations 2018 provides the regulatory structure for the implementation of the NGFCP. The primary objective is to eliminate routine gas flaring, however there are also significant economic and social benefits for Nigeria and communities in the Niger Delta region specifically.

Under the NGFCP, FGN takes ownership of associated gas at the flare site free of charge and bids it out to third parties in a series of auctions designed to attract private-sector participants to develop projects to commercialize the flare gas. Following the release of the Flare Gas Regulations 2018, the NGFCP launched its first auction round by issuing a Request for Qualifications (RFQ) in November 2018. In response to the RFQ, interested parties will submit a Statement of Qualification (SOQ), which demonstrates their ability to meet the minimum technical and financial capabilities required to participate in the NGFCP. The figure below outlines the NGFCP Auction Process from end to end.

Figure 12: End-to-End NGFCP Auction Process

As of March 2018, the NGFCP’s RFQ phase is ongoing and the Statement of Qualification (SOQ) submission deadline has passed. Initial interest in the program is encouraging, as NGFCP received 200+ SOQ submissions. The successful implementation of the NGFCP will result in the effective commercialization of Nigeria’s flared gas, which has the potential to increase domestic supply to on- or off-grid power sector projects and increase access to reliable, more environmentally friendly electricity in the under-served Niger Delta region.

NPSP will continue to support the NGFCP, with activities including, but not limited to, finalizing the Request for Proposals (RFP) and commercial documents, assisting the FGN in issuing the RFP, providing support for the bidder’s conference in 2019, and providing technical expertise to the teams evaluating the proposals.


The next major milestone for the NGFCP will be evaluating the RFQ responses, securing an international law firm and the finalization of commercial documents.

In addition to the support to the NGFCP, NPSP’s Gas Team focused on critical analysis of gas supply agreements and gas supply delivery methods designed to address the Nigerian gas supply enabling environment.

“Barriers to Bankable GSAs” Report: NPSP’s Gas Team developed a “Barriers to Bankable GSAs” report to gain a better understanding of one of the main issues attributed to gas constraints in the power sector: the absence of activated gas supply and aggregation agreements (GSAAs). While the primary roadblocks to activated GSAAs – power sector illiquidity and lack of guarantees – are well-understood by the sector, this report will focus on a deeper exploration of the issues facing buyers and sellers (beyond liquidity and guarantees) to identify opportunities to end stalemates and advance the activation of existing contracts.

To support completion of this technical deliverable, NPSP conducted interviews with international oil companies, power generators, and relevant government ministries to gather valuable inputs for analysis. This report will capture the perspectives of various stakeholders and make targeted recommendations on how to overcome these barriers, end stalemates, and advance the activation of existing and future gas supply agreements. NPSP plans to submit this report to USAID for review and discussion in the next quarter.

Gas Sector Assessment: NPSP completed a review of the gas-to-power value chain and policy framework to identify current challenges and potential interventions to unlock supply and support Power Africa goals. This analysis will inform gas work moving forward, especially regarding prioritizing near term activities. NPSP delivered this report to USAID for review and anticipates finalizing the document at the start of the next quarter.

Gas Successes and Lessons Learned

One of the biggest successes this quarter has been the momentum gained with NGFCP. The RFQ successfully launched at the end of the last quarter and garnered significant interest from potential bidders, a promising sign for the future success of the program. In addition, after some question over which FGN entity would manage the program, the Ministry of Petroleum Resources announced in February that it would retain ownership of the program. This is a positive development as NPSP and our subcontractor Gas Strategies have a strong relationship with the Ministry; the team is working towards increased coordination with the Department of Petroleum Resources and World Bank counterparts as well. The project’s next major milestone will be the review and evaluation of RFQ submissions.

Gas Challenges to Achieving Results

Power Sector Illiquidity: Through discussions with different stakeholders in the gas sector and completion of project deliverables and reports, the direct and detrimental impact of power sector illiquidity has come to the forefront. While there are many challenges to address along the gas-to-power value chain, the inability of GENCOs to pay gas invoices reliably is a non-starter for key issues such as activation of gas supply agreements. Neither party is interested in activating an agreement that they know will likely default the next day in the current sector. This in turn impacts investment in upstream exploration and production, as well as midstream infrastructure, such as pipelines. Although there are targeted near-term interventions that NPSP can accomplish to address some of the other issues, power sector illiquidity will remain a looming challenge to unlocking an adequate and reliable supply of gas to the power sector.


Foreign Exchange Risk: The mixed currency denomination along the gas-to-power value chain is a major roadblock in gas supply because of the burden it places on GENCOs in the form of foreign exchange risk. Gas supply agreements are denominated in U.S. dollars while the remainder of power-side agreements (PPAs and vesting contracts) are denominated in Naira. This discrepancy makes power producers vulnerable to foreign exchange risk and can impact their ability to pay gas invoices when the value of Naira changes. Power producers and IOCs are at a standstill as the electricity market wants gas invoices denominated in Naira without any indexation to the U.S. dollar and the IOCs want full payment in U.S. dollars. Resolving this issue will require buy-in from both parties, which to date has been unsuccessful. NPSP recognizes the opportunity to look at international examples of countries that both export gas and use it domestically to come up with an innovative solution tolerated by both sides.


ON-GRID GENERATION

Technical Context

Following FGN’s attempted privatization of its legacy distribution and generation assets in 2013, the performance of the on-grid power sector in Nigeria has not improved significantly.

Today, with approximately 13.5 gigawatts of installed generation capacity, full system operational capacity remains at less than five gigawatts, even with billions of U.S. dollars in investment and targeted support from multiple stakeholders.

Moreover, because of public sector governance challenges and a lack of a cost-reflective tariff, high investment risk and illiquidity plagues Nigeria’s energy sector, making it difficult to attract new private-sector investment and exacerbating the current energy deficit that leaves many urban and rural consumers un-served or under-served.

To achieve its target of 10,000 MW of unlocked operating on-grid capacity, NPSP will identify:

• where the largest potential impact is likely to come from (i.e., which new or existing projects should receive support based on likelihood to achieve financial close);

• what type of support is most appropriate; and

• which enabling environment elements will be critical to driving sustainable reform, in close coordination with activities under NPSP’s Enabling Environment workstream.

Given the highly complex operating landscape at play in the sector, this understanding and strategic direction will be crucial in promoting transaction assistance that can be catalytic to unlocking on-grid capacity in Nigeria.


This quarter, NPSP’s On-Grid Generation Team, with the support of the Monitoring, Evaluation and Learning Team, developed a transaction shortlist highlighting the priority projects and projected timeline based on project viability and firm confirmation from the implementing parties. The transaction shortlist will assist with setting realistic and achievable targets.

The On-Grid Generation Team also provided ‘critical actions’ content to feed into the Theory of Change being developed by NPSP’s Path to Impact team. These critical actions will seek to address supply-side bottleneck to achieve the following objectives:

• Improve transmission infrastructure and operations

• Activate latent generation capacity and synchronize with demand


• Remove upstream gas supply constraints to generation

• Bring new generation capacity online

Both the Path to Impact and the ME&L Teams are using the transactions shortlist for their respective analyses to ensure that NPSP is united and aligned on critical projects receiving our support.

NPSP provided the Niger Delta Power Holding Company (NDPHC) with a part-time Generation Advisor, Ms. Amaka Onwuli, to advance the privatization of the stalled Geregu II, Calabar, and Omotosho National Integrated Power Projects and unlock 1,452 MW of additional generation capacity. NDPHC is responsible for the management of Nigeria’s NIPPs, and consequently is a key player in the privatization of these plants.

NDPHC chose these plants as the “first phase” transactions because they were fully operational, with limited challenges, and because their preferred bidders were amenable to complete the transaction. From 2015 to date, NDPHC carried out negotiations with the preferred bidders to find a solution to close the transaction, given Nigeria’s struggling electricity market.

Last quarter, NDPHC’s Managing Director proposed an amended payment structure, including a stipulation that the payment should be 30% of the bid price upon meeting conditions precedent, followed by a 70% payment upon fulfillment of certain market performance, such as full payment of generation companies’ invoices by NBET. Such conditions could be difficult for the market to meet.

The Chairman of the Board of NDPHC (FGN Vice President, Professor Yemi Osinbajo) reviewed and rejected this proposal, citing the following factors:

• Stakeholders could perceive changing the payment structure as providing an unfair advantage to the NIPP bidders, compared to other generation companies’ contracts.

• The original transaction model is simple and replicable (as evidenced by its adoption for the ongoing Afam transaction).

• An amendment allowing overtime payment would expose the government to higher risk, particularly given the government’s inability to control certain market variables, such as improvement in market liquidity.

With these objections, the Vice President directed that the NIPP transactions maintain their original payment structure. Based on the directive, NDPHC and the Bureau of Public Enterprises (BPE) contacted the preferred bidders, requesting they confirm their interest to close the transaction on the original payment structure. All the preferred bidders responded and confirmed their interest to close on the original terms, as seen in the table below.


Table 1. NIPP Transaction: Preferred Bidders

SN GENCO Preferred Bidder

Net Capacity (MW)

Preferred Bidders Offer (US$)

1 Alaoji Aiteo Consortium 740 902,000,000

2 Benin (Ihovbor) EMA Consortium 450 580,000,000

3 Calabar (Odukpani) EMA Consortium 561 625,000,000

4 Egbema Dozzy Integrated Power Ltd

336 415,075,000

5 Gbarain KDI Energy Resources

225 340,000,000

6 Geregu Yellowstone Electric Power

434 613,111,113

7 Ogorode (Sapele) Daniel Power Consortium

450 532,777,777

8 Olorunsogo ENL Consortium 675 751,240,000

9 Omoku Shayobe Intl. Limited Consortium

225 319,710,840

10 Omotosho Omotosho Electric Power

450 659,999,000

Following the directive from the Vice President of Nigeria to maintain the original transaction structure in concluding the transaction, NPSP’s Generation Advisor supported the Transaction Advisor with Canadian Pacific Consulting Services (CPCS), a Canadian advisory firm working with FGN, in the development of the closing structure by reviewing the provisions of the Request for Proposal and modifying it to fit the present market situation, accounting for liquidity challenges. The Generation Advisor also supported in determining the overall process, summarized as follows:

1. Request Preferred Bidders to validate proposals 2. Confirm Preferred Bidders Consortium structure 3. Preferred Bidders put in place bank guarantee worth 15% of their bid price 4. NDPHC/Bureau of Public Enterprises (BPE) and Preferred Bidders undertake a technical

assessment of the power plant 5. Recommence negotiation 6. Execute Share Sale Agreement and make the required payment

Based on the revised closing structure and following the conclusion of the national elections, a Joint Transaction Committee (JTC) meeting convened on March 11, 2019, to review and adopt the closing structure. At the meeting, the JTC approved the structure and requested for immediate implementation in line with the approved timeline. However, the NPSP Generation Advisor raised a recommendation to the JTC regarding the NIPP Transaction Power Purchase Agreement (PPA). The recommendation stated that, since NBET was currently issuing an energy-only PPA, JTC along with support from the Transaction Advisor and the NPSP Generation Advisor would likely need to coordinate with NBET to develop a PPA that could close the transaction. This would help determine how NBET can implement the best to structure an energy-only PPA for the buy-in of the Preferred Bidders with respect to their expectation on return on


investment. This strategy is to forestall delays coming from the PPA negotiations and also highlights the key issues that need to be considered for a PPA that is effective in this market.

The JTC’s co-chairs, the Director General of BPE, and the Managing Director of NDPHC, mandated that the closing structure strategy incorporate this recommendation. BPE’s Director General agreed to create open a dialogue with NBET, so that CPCS and the NPSP Embedded Advisor can work with NBET on this PPA structure issue and present results to the Preferred Bidders to secure their buy-in for successful execution of this structure.

The NPSP Embedded Advisor also helped prepare the letter to the Preferred Bidders requesting that they revalidate their proposal and renew their bank guarantee, while also confirming their consortium structure. In addition to the letter, the NPSP Embedded Advisor also updated the proposal validity form and other technical forms1 that the Preferred Bidders will populate to ensure that their proposals still meet the qualifying threshold in terms of technical and financial requirements.

Other supporting documents/forms reviewed by NPSP were:

• Disclaimer of Relationships • Ownership and Business Arrangements of the

Preferred Bidder • Status of Financial Profile • Acquisition Vehicle

The Preferred Bidders expect to have the letters and forms upon signature by BPE and NDPHC by March 25, 2019, which should kick-start the transaction process; they received these documents on April 1, 2019. It is worth noting that the deadline for posting of the bank guarantee is 1st May 2019. If a Preferred Bidder fails to post a bank guarantee at the stipulated time, the Preferred Bidder can be declared non-responsive and the transaction with that Preferred Bidder will be effectively terminated.

The NPSP Generation Advisor is working with CPCS to set out the arrangement for a technical assessment of seven of the power plants to ensure their readiness for the visit of the Preferred Bidders at the appropriate time (yet to be determined). The technical assessment is necessary to assure the Preferred Bidders that the plants they bid for were technically sound and to confirm the level of depreciation five years into the transaction process.

During a meeting of NDPHC Board of Directors held on January 17, 2019, the Board directed that NDPHC develops alternative approach to privatizing the assets should any of the ongoing transactions fail to reach financial close. Based on this directive, NDPHC MD requested that CPCS with support of NPSP Advisor generate strategic options for the consideration of NDPHC Board. Some of the options developed include a long-term lease arrangement, operations and maintenance structure, and concession. Whichever option adopted will carry a caveat that after a period of such operation, the entity implementing the operation can buy out the plant from NDPHC when the electricity market has recovered.

NPSP is also supporting the development of the retendering process to be prepared should any of these transactions fail. This ensures that the process, the strategy, and the technical assessment of the plants,

1 The revised Request for Proposal (RFP), dated 11th October 2013, contains the original technical forms.


which are major requirements for a retendering process, are all in place to ensure a smooth transition from a failed transaction to a new process without delay.

The project has contacted the Preferred Bidders, and all maintained their interest in closing their various transactions despite the inactiveness of the transaction this year due to the election exercise. The next step to drive the transaction forward is posting of bank guarantees by the Preferred Bidders.

NPSP will continue to support NDPHC and BPE, along with CPCS, in implementing the NIPP generation asset privatization transaction to bring them to financial close.

NPSP’s Generation Team continued its support to high-priority on-grid energy transactions, including the following:

Afam and Yola: BPE invited NPSP’s Generation Advisor to witness the proposal submission for Afam and Yola, held on March 15, 2019, at BPE headquarters. Additionally, NPSP’s Transmission Advisor, Dr. Seun Amoda, provided monitoring support to BPE, in the capacity of TCN, with the evaluation of technical proposals for Afam and Yola privatization transaction. NPSP conducted the technical evaluation over a three-day period and included participation from the BPE-contracted Transaction Advisors, representatives of BPE, TCN, Federal Ministry of Power, Works and Housing (MOPWH), and NBET.

Taleveras, the Preferred Bidder for Afam GENCO, signed a Power Purchase Agreement (PPA) in December 2013 with the BPE for the Afam GENCO; however, they could not conclude the transaction because of a government delay in signing the Gas Supply/Purchase Agreement (GSAA) and the Gas Transportation Agreement. Because of this delay, Taleveras requested the termination of the transaction.

In 2017, the National Council on Privatization, chaired by the Vice President of Nigeria, gave approval for a fresh transaction to privatize the two power companies. FGN expects that the successful bidders will be responsible for operating the GENCOs and DISCOs while making the necessary investments to increase the generation and distribution capacities.

Infrastructure Concession Regulatory Commission (ICRC): NPSP engaged ICRC to offer transaction, legal, technical, or other mandated technical assistance on near-term hydro projects that can add MW of clean baseload power to the grid or to local off-takers through eligible customer agreements. NPSP anticipates these initial conversations will continue in the upcoming quarter before we define an action plan for technical assistance.

Manufacturers Association of Nigeria: NPSP has initiated preliminary engagement with the Manufacturers Association of Nigeria and NDPHC on potential support for defining an eligible customer business model. NPSP’s value proposition includes:

• Support potential eligible customers through the process of becoming a designated eligible customer, including developing an intake form, assisting them with completing this and other necessary forms, navigating them through the process, etc.

• Support GENCOs and potential eligible customers with commercial, technical, and regulatory issues that might hinder the finalization of the eligible customer process; issues including negotiation with TCN on transmission system usage, negotiation with DISCOs on distribution system usage, and negotiation with Nigerian Electricity Regulatory Commission (NERC) on an appropriate eligible customer tariff, among others.


• Support GENCOs to assess the economics of the eligible customer model, including supply, tariff build-ups, return on investment, financing, and power purchase agreement components.

• Develop a PowerPoint that explains eligible customer regulations, realities, reliabilities, risks, and rewards to potential eligible customers and holding well thought-out investor fora to identify debt, equity, and credit enhancement stacks.

Lastly, NPSP continues to provide broader support to the GENCO community through its strong and sustained relationship with the Association of Power Generation Companies (APGC) to proffer recommendations on ways to address liquidity issues affecting GENCOs operational performances.

In February 2019, the Green Climate Fund (GCF) approved a concessional financial aid of US$100 million to support the development of solar power projects in Nigeria under the Solar Independent Power Producers Support Program. GCF anchors the program with support from the Africa Finance Corporation (AFC) as the accredited entity. The US$100 million forms part of the nine new climate resilience and low emission projects totaling US$440 million endorsed at the 22nd meeting of the GCF Board that took place in March 2019.

The initiative will support eligible solar IPP projects that have previously signed PPAs with NBET to achieve financial close. Some of the solar IPPs to benefit from the US$100 million concessional loan include:

• Nova Scotia Development Power Limited (80 MW);

• Nova Solar 5 Farm Power Limited (100 MW);

• Pan-Africa Solar Limited (75 MW); and

• Nigeria Solar Capital Partners (100 MW).

The GCF program aims to reduce the perceived risks of investing in the Nigerian renewable energy sector and act as a catalyst for private-sector investment in this space, through a commercial tranche, on a best effort basis.

Following the PPA addendum execution deadline of January 2019, some of the solar IPPs requested an extension to the deadline from NBET, to enable them to rework their financial model to accommodate the tariff reduction and negotiate better terms to the agreement to ensure project bankability and ensure financial close. The request was a reaction to an addendum made in October 2018 by NBET, in coordination with the Ministry of Finance (MoF), which included terms that could make the projects less bankable. For example:

• NBET would only be responsible for energy payments (i.e., no capacity payments);

• FGN will not mitigate foreign currency exchange risk; and

• NBET will not accept any risk of failure to dispatch because of transmission constraints.

Under Power Africa Transaction Program (PATRP), Power Africa provided support to NBET to negotiate the PPA with 14 solar IPPs, although the process stalled. However, with GCF concessional financing in place for some of the solar IPPs, NPSP expects PPA negotiations to recommence soon. NPSP will continue to provide legal, technical, and commercial advisory support to NBET in critical negotiations, identify


issues and approaches to existing credit and liquidity challenges in order to ensure the transactions reach financial close.

NPSP will also extend advisory support, as needed, to private developers and lenders in identifying the available credit enhancements and the process of developing and negotiating such agreements with the FGN and associated parties. NPSP is available to mediate between private developers and the TCN to meet the criteria for grid connection.

Generation Successes and Lessons Learned

A key milestone and success this quarter is the submission of technical and financial proposal for the Afam privatization transaction and the recently concluded technical bid evaluation exercise. The next milestone on the transaction is the financial evaluation from which a Preferred Bidder will emerge for each of the transactions. The successful privatization will see to the completion of the Afam “fast power” power plant and refurbishment of the existing units in anticipation to add over 900 MW to the grid.

Another success recorded is the approval of the NIPP privatization transaction structure and subsequent directive to proceed with the transaction, which stalled for over four months due to delayed approval processes and the recently concluded national elections. The approval and subsequent directive will kick-start the process, which has the continued interest of the Preferred Bidders.

Generation Challenges to Achieving Results

Electricity Market Liquidity: The magnitude of losses in the electricity market has grown to the point that NBET remits only 30% of invoices. This is a major source of concern to investors and operators in the sector considering that recovery of investment is unlikely under the present operating conditions. With the growing level of indebtedness across the sector and the inability of the DISCOs to fund loss reduction strategies and network expansion plans, the market may struggle to reach its expected growth. FGN is taking pragmatic steps toward resolving the growing crisis in the market, such as the Power Sector Recovery Plan however, any intervention would require considerable time to remedy the situation.

NBET Interim Agreement for Power Purchase: The decision by NBET to issue an interim (energy-only) PPAs would continue to negatively impact additional grid capacity and investor appetites – this needs resolution for the NIPP transactions to reach financial close. The transactions require the support of industry/sector stakeholders to guarantee successful completion.

Scarcity of Capital: Closing of NIPP transactions requires US$5.6 billion2, with a significant portion of funded from debt. In addition to financing required for NIPP transactions, the 11 DISCOs are in dire need of financing to implement much needed loss reduction projects. There is need for significant investment in the Nigerian power sector to ensure viability and sustainability; however, the reality is that there is limited capital available in the financial market.

This scarcity specifically effects the NIPPs. Preferred Bidders have expressed concerns and requested for adjustments to the transaction structure to improve the bankability of their transactions and therefore ensure that their respective transactions close successfully. However, FGN did not grant this request and is enforcing the directive to maintain the original transaction structure. This is likely to result in some of the transactions not being able to close due to financial constraint.

To support in addressing some of the challenges highlighted above, NPSP is conducting an end-to-end sector assessment to provide a holistic view of the current state of the power sector and create a unified theory of development for the Nigerian power sector that can be coordinated with other development partners to allow for more efficient coordination and more effective delivery. The assessment will help

2 Total of bid purchase price for all 10 NIPP generation companies.


identify gaps, assess opportunities for NPSP support, and develop a prioritized approach that can help in resolving some of the sector issues.

In addition, NPSP is providing support to the Nigeria Electricity Regulatory Commission (NERC) to develop and implement a cost-reflective tariff by conducting a model gap analysis of the multi-year tariff order (MYTO), aiming to ensure the accuracy of the assumptions used, ensure their replicability, and assess the user friendliness of the model.

NPSP will continue to highlight these major challenges to key sector stakeholders and support to proffer solutions to resolve the sector challenges.


OFF-GRID GENERATION

Technical Context

The off-grid sector poses a significant opportunity for Nigeria, but challenges to its large-scale deployment are considerable. The absence of integrated energy planning hinders FGN from providing effective guidance to the market and curtails the ability of the underserved to make investment and purchasing decisions. Concurrently, underdeveloped regulation discourages the type of flexible implementation needed to support off-grid penetration. Private-sector hesitancy towards investment in new technologies and business models in emerging markets, as well as a paucity of financial products capable of stimulating investment often compound these challenges.

NPSP’s Off-Grid Team has defined activities addressing the core policy, institutional, and financial barriers to achieving rapid and sustained off-grid market development. While working directly with Nigeria’s REA, private developers, and capital providers, NPSP will support scaling up of the off-grid sector. This will dramatically impact service cost, attractiveness to consumers, and investor risk and returns, thus changing the off-grid electrification landscape.

This quarter, NPSP’s Off-Grid Team piloted several exciting initiatives, split into two primary components: 1) work with REA and 2) advisory services for private-sector companies serving the off-grid market.

In addition to these areas of support, NPSP conducted several assessments in the previous quarter, aimed at facilitating an in-depth understanding of the sector, encompassing the following:

• Off-grid Capital Map and Gap Analysis providing details of interested investors in the sector, challenges and identifying donor activities and gaps in the sector

• Baseline Studies to understand the current private-sector companies in the sector, their challenges and opportunities

• Strategies for Expansion for SHS Companies to help them scale and grow

• Market Intelligence Report, for public dissemination, encompassing the findings from above assessments and others

NPSP submitted these assessment reports to USAID in the previous quarter and based on comments received, NPSP resubmitted revised versions and received approvals from USAID in this quarter.



NPSP continued to provide technical assistance to Nigeria’s Rural Electrification Agency (REA) to advance its Energizing Economies Initiative (EEI), which electrifies local markets with solar and hybrid mini-grids. In this quarter, REA has activated six more sites in Phase 1 of the initiative, translating to an additional 5,358 connections and bringing the total number of connections achieved to about 8,000 connections to date.

REA commissioned Ariaria Market (from Phase 0) and Iponri Market, which are ready to commence the final step of billing and collections in the market electrification process. The following figure summarizes the status of the six markets (excluding Ariaria):

Figure 13. Completion Status of EEI Markets

Accessibility of project financing has acted as one of the largest challenges to REA’s ability to rapidly scale the Energizing Economies Initiative. In the last quarter, NPSP worked with the Central Bank of Nigeria (CBN) to develop a solution: projects would offer their revenue pledge account as collateral, instead of the conventional asset-based collateral typically expected by lending banks. This mechanism will consolidate revenue from multiple payment sources and allow CBN to drawn down against the principal loan amount from this pool of revenue, de-risking their lending activities in the sector. CBN employed a similar framework for its Nigeria Electricity Market Stabilization Facility (NEMSF), which addresses recurring payment shortfalls in the on-grid energy sector. Based on these discussions, CBN proceeded to work with commercial banks to create a funding facility for this mechanism.

NPSP began discussions with Sterling Bank regarding the administration of the funds from CBN, while establishing intent of replicating this same process with four other banks, specifically GT Bank, First Bank, Eco Bank, and Union Bank. NPSP has received a summary of terms, favorable to the projects, including a 17% concessional interest rate, a six-year term (with a one-year moratorium) and no need for physical collateral. This mechanism aims to reduce the requirement for conventional asset-based collaterals for borrowing for such projects, which is extremely difficult—if not impossible—for the project developers to furnish. In addition, NPSP expects this mechanism to create a new paradigm in terms of utilizing the revenues as a collateral for projects of this scale.


NPSP, working alongside REA, has been supporting the discussions with Sterling Bank concerning the disbursement of the first tranche of ₦1billion from the proposed N5bn funding to the developers. NPSP expects that there shall be an initial of ₦1billion (being ₦500 million per developer) upon meeting credit analysis requirement of the bank. Additionally, Virtus has received an equity investment of US$500 thousand, which they will use to procure additional hard assets, such as solar panels, batteries, and accessories. This equity injection will additionally fulfil Sterling Bank’s requirements for equity contribution from the developers. NPSP is supporting the developers and REA to put together all documentation required for the banks to conduct due diligence that will enable the drawdown of the debt.

In addition to NPSP’s support for REA’s EEI, NPSP is also supporting the REA’s Rural Electrification Fund’s (REF) administration of the Mini-grid Acceleration Program, sponsored by the European Union’s Nigerian Energy Support Program (NESP), which GIZ implements. To support the administration of this program, NPSP developed a web portal together with Odyssey. The key features of this portal are:

• General information: Applicants will access information about the grant program, eligibility requirements, etc.

• Application module: Applicants will complete and submit their applications in this module, which will include the following components:

o Project information and eligibility assessment

o Customer data

o Demand assessment modeling

o Tariff modeling

o Financial modeling –The Financial Model has three salient features All data used in the model are pulled in from the customer data, demand model,

tariff modelling, etc., earlier, for each project.

All projects can be combined to form a portfolio.

Possibility of integrating the financial model with a Key-Maker model for additional revenues from related businesses.

o Submission

• Evaluation module: Evaluators will review submitted applications and score them using an evaluation matrix with four components. Each of these will be housed in a separate folder.

o Document submission check

o Evaluation of eligibility criteria

o Due diligence on the applicant’s company, including evaluation of existing projects

o Evaluation of the proposed project

• Execution module: o Project management tool –This project management tool will be like the Energizing

Economies Initiative project management tool developed by Odyssey and adapted to the requirements of the current program. The inputs to this tool will be enabled through a mobile phone application interphase.

o Project operations data – Project managers, technical assistance providers, and administrators will view and analyze telemetric monitoring data from project operations.

• Data rooms: Throughout all four phases of the grant program, users will submit and store supporting documents, data, reports, etc. This data is uploaded on data rooms with standard formats, enabling easy access of the data for reviewers/evaluators.


On February 6, NPSP hosted the regular quarterly Off-Grid Stakeholders Meeting together with All On, alongside the Taskforce meeting, which Power for All hosted afterward. More than 50 participants attended the one-day meeting. The focus of this quarter’s meeting was to understand the plans for various donor programs for the year 2019. Representatives from all the key donor programs in the off-grid space were present. In addition, the Off-Grid Stakeholders Meeting invited two US firms to present their solutions for the off-grid sector: Tesla and Odyssey. NPSP presented their findings from their assessment on Strategies for Expansion for SHS Companies. There was also a group discussion around the funding available, especially for donor programs, such as NEP, in the sector and how developers can plug in to these investments.

The Task force was set up in line with USAID’s Scaling Off-Grid Energy program, administered by Power for All, to continue to adopt strategies alongside activities that will scale up decentralized renewable energy solutions across the country through five different working groups. Some of these activities include community engagement and to ensure continuity, the Quarterly Off-grid Stakeholders Meeting incorporated taskforce activities to ensure buy in and full participation of the intended stakeholders. This quarter task force meeting highlighted the following issues:

• The scaling down of the five working groups to two or three that will address more burning issues.

• To create synergies with industry associations, such as REAN, AMDA, WIRE-A to better provide support to them and build out the workplans.

• To open discussions with NPSP and REAN on the issues that border around certifications and capacity building and product standardization.

In addition to convening the donors, NPSP has begun coordinating efforts with other USAID programs in-country. The most matured inter-program effort exists between NPSP and USAID’s Integrated Healthcare Program (IHP). The NPSP and IHP teams are working to develop a viable model for pairing mini-grids and primary health care centers, which shows the primary levers for achieving sustainable economics amongst the multiple parties involved, seen in the figure below.


Figure 14. Tentative Mini-Grid Model

Together, this initiative, collectively known as “Sustainable Healthcare,” has determined that, of the three states where IHP operates on-the-ground, Bauchi state will serve as the initial proving ground for this concept. In summary, completed activities include:

• Concept note development and approval from USAID

• State identification – Bauchi State

• Initial site identification conversations

• Endorsement of support by REA

Coordination activities between NPSP/IHP and the Bauchi state government have begun, with a more formal kickoff tentatively scheduled for some time in Quarter 3. Additionally, NPSP has held conversations for potential off-grid synergies with USAID’s Feed the Future program; Water, Sanitation, and Hygiene (WASH) program; and telecom tower service providers in Nigeria, such as IHS Towers and American Towers.

This quarter, NPSP continued to strengthen its relationships with multiple donors to help connect and support innovating financing mechanisms and work towards reducing transaction times and costs for financing in the off-grid space. This leverages further the assessment of the Off-Grid Capital Map and


Identification of the Gaps in Donor Programs, which identified a list of potential investors in the space and the challenges to financing.

NPSP proposed to REA, World Bank, GIZ and other stakeholders to support in the achievement of two primary objectives:

1. To identify potential sources of financing; and

2. To identify potential strategies to reduce transaction time and transaction costs leading to capital draw down from additional financiers.

Since last quarter, NPSP has begun to deploy a comprehensive team (which includes Deloitte US, Deloitte Nigeria, and CrossBoundary Advisory) to accelerate the investor potential engagement process in support of REA and the program partners. The team has worked on the following:

• An investor engagement plan

• A teaser showcasing the investor opportunity in the sector in Nigeria, jointly developed with REA

• Presentations targeted to specific types of investors viz., debt, equity, impact, etc.

• Standardized financial model; working with Odyssey for mini-grids at project level and portfolio level; which Odyssey will host for all the programs using the platform for the administration of the program

• Standardized financial model for SHS companies

The team has attended the following key relevant conferences and has been meeting investors to showcase the opportunities in Nigeria in the sector. These include:

Powering Africa Summit (Miami, February 25-27, 2019)

NPSP sent several delegates to the Powering Africa Summit in Miami, which brought together senior government officials, donors, and the private sector for three days of meetings focused on how to advance key energy priorities across Sub-Saharan Africa. NPSP’s participation included meetings with a host of developers and investors with experience and/or interest in developing and investing in off-grid energy projects in Nigeria. At the summit, NPSP also hosted a breakfast event at the Powering Africa Summit that brought together senior FGN officials, key donor partners, potential investors, and implementing partners for an informal set of discussions on how we can move the sector forward and best respond to the outcomes of the February presidential elections.

ARE Energy Access Investment Forum (Abidjan, March 13-14, 2019)

NPSP sent several delegates, including the REA, to the ARE Energy Access Investment Forum in Abidjan, which convened public, private, and other stakeholders with the common goal to boost clean energy access in Africa. NPSP’s participation in the two-day event included formal meetings and informal discussions with many regional and international investors with experience and interest in mini-grid projects and SHS companies, as well as developers and other partners active in Nigeria. This event was timely for proactive engagement by REA and the team as the NEP nears its formal stakeholder’s workshop and launch.

Africa Energy Forum – Off the Grid (Addis Ababa, March 27-29, 2019)

NPSP sent several delegates, including two delegates from the REA, to the Africa Energy Forum – Off the Grid conference in Addis Ababa, co-located with the Regional Energy Cooperation Summit. AEF is a key annual Pan-African event that convenes decision makers for mini-grid and SHS solutions. The conference, which included NPSP and REA participation on several panels, highlighted annual progress made to date in off-grid project development and innovation and offered NPSP and REA the opportunity to further preview and discuss the various off-grid funding programs launching in Nigeria this year.


The key opportunities are as follows.

World Bank/AfDB Nigeria Electrification Project (NEP)

The World Bank’s Energy Sector Management Assistance Program (ESMAP) expects to launch the Nigeria Electrification Program (NEP) in the late spring of 2019. African Development Bank (AfDB) also expects to launch its follow-on program just after the World Bank, both of which REA will be managing. These programs will primarily facilitate the use of results-based grants (for recipients) and successful grantees must raise 100% of funds upfront for project construction, or working capital financing for SHS companies, before receiving the grant.

GIZ NESP Mini Grid Acceleration Scheme (MAS)

This quarter, GIZ, the implementing agency for EU’s Nigerian Energy Support Program (NESP), launched an in-kind grant program through REA’s Rural Electrification Funds (REF) division with a value of €6 million. Like the NEP, this grant program also requires the identification of potential sources of funding. Additionally, NPSP is coordinating with GIZ on the development and refinement of the Odyssey platform for administration of this and future grant programs by REF. As noted in this report’s Project Highlights section, NPSP attended the MAS program launch in January in Abuja to kick off its assistance with NESP and supported the development of the Odyssey platform for the administration of the grant by REF, which culminated in the launching of the Odyssey platform for the MAS program near the end of the quarter.

REA’s Energizing Economies Initiative (EEI) program

Based on the progress and learnings from the first phase of the program, EEI is working to launch a second and third phase subsequently, with an expected funding requirement of US$750 million.

Additionally, as reported above under the support provided to REA, NPSP working alongside REA have been supporting the discussions with Sterling bank concerning the disbursement of the first tranche of ₦1billion from the proposed N5bn funding to the developers. NPSP expects that there shall be an initial of ₦1billion (being ₦500 million per developer) upon meeting credit analysis requirement of the bank. Additionally, Virtus (a developer) has received an equity investment of US$500 thousand, which it will deploy towards procurement of additional hard assets, such as solar panels, batteries, and accessories. This equity injection will additionally fulfil Sterling Bank’s requirements for equity contribution from the developers. NPSP is supporting the developers and REA to put together all documentation required for the due diligence the banks are conducting that will enable the drawdown of the debt.

USADF – All On Grant Program

NPSP has also agreed to support the United States African Development Foundation (USADF) on their forthcoming grant program for off-grid projects (in cooperation with All On). This support will be in mentoring the selected projects to improve their investment-worthiness and presentation pitches.

The NPSP team has developed a series of reports and analyses to expand understanding of Nigeria’s off-grid market and provide tactical strategies to prospective market entrants. These documents include the NPSP Market Intelligence Report, the Strategies for Expansion Report, and a Value Chain Mapping Report that focuses on the SHS market, highlighted in the summary below. NPSP submitted the first two in the previous quarter and the third in this quarter.


NPSP’s Value Chain Mapping Report: An evaluation of SHS value chains in Nigeria that identifies potential cost and efficiency savings for SHS companies exploring market entry. NPSP analyzed the value chains of five archetypical SHS companies in Nigeria to understand the cost structure, profitability and opportunities for cost reduction based given various business model choices. The document is focused on developing key value chain insights that can be shared with other off-grid companies operating or planning to operate in Nigeria to help inform their value chain strategies. NPSP has also developed a tool to support SHS companies to carry out cost mapping across their value chain to help them make appropriate decisions like outsourcing, etc.

Figure 15. SHS Value Chain

The NPSP team has had initial discussions with a variety of international actors interested in entering the Nigerian market. Among these is Tesla, who is currently engaged in an exploratory manner with NPSP to establish the market potential for large battery devices. NPSP has already submitted a presentation to Tesla and have discussed with the Business Development Team at their head office in Los Angeles and exploring financing solutions and innovative business models. In addition to this, a separate interaction has taken place with USAID. NPSP has scheduled further conversations to explore this further.

In collaboration with Nigeria Off Grid Market Acceleration Program (NOMAP), NPSP is working on:

• A mapping exercise to support expansion of SHS with four layers of information visualization

o Potential for SHS based on population and geospatial tools (completed by NOMAP)

o Operations of various microfinance institutions across the country (completed by NSPS)

o Network of private payment service providers (ongoing)

o Banking agents’ network under the Central Bank’s Shared Agent Network Expansion Facility (SANEF)

• A White Paper on the development of a common platform for payment processing, thus reducing the hooking up and transaction costs for PayGo services

In addition to the interventions listed above, NPSP’s off-grid transaction support team is currently providing active support to 18 off-grid companies, reviewing engagement with nine companies and, has reached out to 22 companies to discuss potential areas of support. Companies in the pipeline as of March 2019 expect to yield approximately total 441,930 connections, based on estimates provided by the companies.

Active engagements summary:

The NPSP team is actively engaged with a total of 18 off-grid companies – 12 SHS companies, five mini-grid companies, and one company that is developing a small hydro project in Ondo State. The companies expect to yield approximately active 340,933 new connections and 27.4 MW following support from NPSP.3 Of the 18 active engagements, 12 have requested investment facilitation support from NPSP. This underscores the fact that access to finance is one of the main barriers to growth for most companies in the industry. As such, transaction support, such as financial modeling capacity building, pitch deck support, and investor introductions (sourcing funds), is critical in promoting growth of the off-grid sector. 10 out of

3 These numbers are based on company estimates


the 18 active engagements are local companies that have been operating in Nigeria for more than two years while the rest are international off-grid companies setting up in Nigeria or expanding from other Sub-Saharan countries.

In the past two months, the NPSP team has been providing support to off-grid companies in three key areas: fundraising support, support in understanding the payments landscape, and support in developing and improving the off-grid companies’ distribution strategy.

• Fundraising support: NPSP has been leveraging the Capital Map and Donor Analysis report and Investor Database to facilitate introductions to investors. In addition, the team has been working with companies to develop “investor ready” financial models and pitch decks.

• Payments landscape support: NPSP has mapped the digital financial services landscape in Nigeria and conducted a comprehensive analysis of eight digital financial services products and providers. The NPSP Team has also developed a framework for payment partner prioritization that off-grid companies will use to inform the selection of e-payments companies.

• Distribution strategy support: NPSP has been helping off-grid companies develop a roadmap for accessing high potential distribution partners.

Table 2 below shows the type of support provided to different companies.

Table 2. NPSP Support Provided to Off-Grid Companies Fundraising Support

1. ICE Commercial 2. Creeds Energy 3. CESEL 4. Asolar

5. Fenchurch - Solarpawa 6. Rensource 7. AMES 8. Smarter Grid

9. Owena Hydro 10. PAS BBOXX 11. Zola 12. Solar Global

Payments Landscape Support

1. d.light 2. Greenlight planet 3. Azuri 4. PAS BBOXX

5. M-Kopa 6. Fenix 7. Zola 8. Fenchurch – Solarpawa

Distribution Strategy Support

1. d.light 2. Greenlight planet 3. Azuri 4. M-Kopa

5. Fenix

NPSP’s work with Odyssey Energy Solutions over the past quarter will promote quality standards within the sector. Odyssey’s standardized platform for the development of mini-grid projects will provide a comprehensive mechanism for potential investors to access and view potential sites related to upcoming grant organization tenders, and the platform will follow the National Renewable Energy Lab’s Quality Assurance Framework for project execution and monitoring.

Incorporating these standards within the platform will ensure that project development will be consistent and transparent across a multitude of investors, mini-grid sites, and geographic locations. NPSP is piloting this effort in conjunction with the upcoming World Bank NEP tender to increase its reach and impact.


NPSP is in active discussions with International Finance Corporation’s (IFC) Lighting Africa program, which is coming to an end shortly, to continue with their efforts on working with the Standards Organization of Nigeria in adopting GOGLA’s standards on SHS.

Off-Grid Successes and Lessons Learned

Data Availability: Though several existing donor programs continue to provide the resources required to make data available and lift this barrier, a common repository for these data such that it can be readily accessible and obtainable is still lacking. There is a need to work with partners that will have no limitations in making this information accessible and to coordinate this information for all stakeholders.

Both SHS companies and mini-grid developers feel the need for reliable and user-friendly geospatial tools for data analysis.

Transaction Timelines and Transaction Costs: The key successes during this period included advancing previous work with CBN and the commercial banks, led by Sterling Bank, to find a suitable solution for financing small-scale mini-grid projects in local currency. Use of the proposed Revenue Pledge Account structure was further advanced through meetings with FGN, Sterling Bank, and sample project developers in Lagos in January.

In addition to exploring scalable alternative financing structures, NPSP is actively identifying several potential strategies for driving down transaction timelines and costs as part of its support to REA in rolling out the NEP. As part of this effort, NPSP is building market knowledge of the off-grid opportunity and planning to educate investors, lawyers, engineering firms, and others on the typical tenets of the off-grid projects/companies. The team has already engaged Deloitte Nigeria and CrossBoundary and envisages to engage with a technical firm, and a legal firm to assist in codifying the typical financial/commercial, legal, and technical due diligence processes to streamline processes and provide standardized documentation.

This stands to add substantial value to the sector, both increasing the attractiveness of the marketplace to investors and decreases the barriers to entry. In turn, with more investors interested and able to enter the market, the market could experience increased investment activity and an increase of mini-grid developers and SHS companies providing off-grid solutions.

Importance of Coordination: Within the off-grid market there is a large potential for synergies amongst multiple donor programs and business models, taking advantage of areas of specialization and proving the viability of these models – and bringing together multiple, disparate programs – is the challenge. The NPSP team is advancing this lesson through its partnership with World Bank, IFC, AfDB, GIZ, Shell Foundation, USAID’s Integrated Healthcare Program, Feed the Future Program, and Water, Sanitation and Hygiene programs with the goal of expanding to other USAID programs, and beyond.

Off-Grid Challenges to Achieving Results

Lack of an Enabling Environment: Nigeria currently has a high-duty/VAT structure with importers paying 15%–25% in duties and other tariffs. This imposes a huge burden on the prices of these products targeted at the bottom of the pyramid and negates the National Renewable Energy and Energy Efficiency Policy (NREEE) policy. In addition, some of these tariffs are not clear and are open to subjective interpretation by Customs and Excise, further driving up the pricing as manufacturers adopt a conservative approach. NPSP is considering addressing this challenge through a dedicated task-force drawn from the members of the sector, including developers and contractors. There are ongoing efforts on this and NPSP shall strengthen this pursuit further.

Agent Banking/Pricing: The currency devaluation has had a negative impact on the cost of SHS products, which then passes on to the customer who are very price sensitive. Pricing is a deciding factor, which inhibits the penetration and choice of these alternative SHS options, as well as the cost that companies must pay to the agents to be able to access their networks. NPSP is working to develop strategies that would mitigate timelines and costs associated with this.


Transaction Costs in Payment Processing are a challenge for PayGo solution providers and hence NPSP is working on a white paper on a common infrastructure for payment processing with an aim to reduce such transaction costs.


TRANSMISSION

Technical Context

Transmission capacity is a key constraint to the development of the Nigerian power sector. Transmission grid stability remains a major challenge, with a high number of system collapse incidents (i.e.,12 system collapses in 2018). Despite the critical need to expand the transmission system, FGN has not fully funded TCN’s current transmission development plan due to limited available public-sector capital and challenges in attracting private-sector investment. Nevertheless, if TCN enacts the appropriate structures to attract and catalyze private-sector investment in priority transmission projects, there is tremendous private-sector and development partner funding available for use.

In parallel, NPSP is also assisting TCN leadership to develop a plan for improving system and market operations. As part of broader efforts to overcome sector tensions and increase coordination, NPSP also aims to help TCN manage its strategic communications with other power sector stakeholders, including Nigeria’s DISCOs and regulator.


TCN has submitted seven terms of reference (TORs) to NPSP, described in detail below, regarding focal support areas, and most of the requests focus on creating enabling environment for TCN. TCN has not requested support on a financing program or facilitating private investment in transmission, most likely because they scoped the Transmission Rehabilitation and Expansion Program (TREP I) prior to NPSP’s inception.

However, it is very likely that TCN will request NPSP assistance for support in financing program or private investment in the nearest future, once NPSP has ramped up work on the TORs that focus on grid stability and reliability, and thus support a better revenue profile for TCN.

From an enabling environment perspective, NPSP’s Transmission Transaction Advisor, Dr. Seun Amoda, already embedded in the office of TCN’s Managing Director (MD), is assisting TCN in identifying and scoping their key organizational needs that NPSP can provide. In this exercise, the project team has identified seven detailed terms of reference to the team for review and comment. Scopes of work requested included:

• Asset Management: Supporting TCN’s efforts to modernize its asset register and develop a procedure to GIS map assets.

• Business Development: Support TCN decision making around new business models, specifically high-voltage eligible customers.

• Financial and Commercial Support: Support TCN in evaluating PPP options for new lines, and maintenance of old lines.

• Emergency Protection Coordination: Review TCN’s current emergency automatic protection system and propose improvements to enhance grid reliability.


• Procurement Support: Develop guidelines for specialized procurement of line maintenance

• System Operations: Support the Independent System Operator in 13 technical areas ranging from procurement of ancillary services to enforcement of grid code compliance.

NPSP is reviewing these terms of reference to determine where to provide support, and the team is in the process of contracting resources to engage with the different parts of TCN to support the requests. Initial engagement will gather facts and provide decision support to TCN and to the project to determine further support levels.

Many donors are currently providing financing support to TCN’s TREP 1 with roughly US$1.6 billion of funds pledged. NPSP is currently identifying the technical assistance that will allow such a program to be successful. Initiatives discussed include transmission planning and asset management support.

NPSP Transmission Transaction Advisor, Dr. Amoda, worked with TCN to identify how TCN can wheel more power out of the stranded generation power to consumers who will pay for it. NPSP identified MAN, which has a large block of consumers across the country, and the team has started preliminary engagement with MAN on how they can key into the Eligible Customer Regulation to get cheaper and cleaner power than from diesel-fired power plants. Many MAN members rely on expensive and dirty diesel generators to run their production processes and a substantial amount of MAN members have stopped production due to many factors, including high cost of electricity, making their products uncompetitive with imported (and sometimes smuggled) products. The overarching goal of this support is to see how to revitalize some industrial clusters so that are more competitive with imported goods by taking advantage of competitive power offered by the Eligible Customer Regulation.

NPSP Transmission Transaction Advisor, Dr. Amoda, also conducted analysis on the status of customers connected directly to 132kV and 330 kV network portions of the grid. The analysis focused on the way the 2005 Electric Power Sector Reform Act (EPSRA) and Grid Code classified them, how TCN can better serve them, and possible opportunities provided for them by the Eligible Customer Regulations.

Transmission Successes and Lessons Learned

In terms of successes, NPSP appears aligned with TCN regarding providing support for technical system operations. NPSP had previously identified technical system operations as a focal support area, which is why NPSP wrote an End-to-End Sector Report detailing this subject. Two out of the six TORs submitted by TCN to NPSP focused on an issue identified in the report on technical system operations.

NPSP has learned in this quarter, based on interactions with TCN and the TORs submitted by TCN, that TCN is currently focusing on grid stability and reliability in addition to its ongoing grid expansion program, and TCN is interested in developing a robust asset management system through the help of NPSP. TCN is not currently requesting for support on its TREP 1 grid expansion activities, but it is likely to do so in the future.

Transmission Challenges to Achieving Results

Revenue Shortfall: Along with other players in the power sector, TCN faces non-cost-reflective tariffs because NERC has not issued a tariff order since early 2016 to adjust for exchange rate and inflation. At present, TCN estimates that their tariffs are less than 60% of what they should be. Compounding this situation, the DISCOs only remit about 30% of the non-cost-reflective tariffs to the TCN, causing TCN to earn about less than 20% of what it needs to operate and maintain its lines, transformers, and other substation apparatuses; attract and retain productive talent; and payback its loan obligations. Without government intervention, 20% of needed revenue will be insufficient for TCN to operate and maintain its grid. In addition, it will be difficult to carry out expansionary activities. For the year ended December 2018, the DISCOs underpaid TCN by at least US$150 million.


The liquidity issue is pervasive across the sector, and NPSP is working with stakeholders to revisit these foundational issues. At present, NPSP is working with NERC to audit the MYTO model, and with BPE to determine the most expedient path to enforceable performance improvement plans. In the meantime, NPSP is planning to work with TCN to identify additional sources of revenue (Eligible Customer), and opportunities to partner with the private sector (PPPs).


DISTRIBUTION

Technical Context

Given an aging distribution network infrastructure, lack of adequate system planning, high commercial and technical losses, financial mismanagement, and gaps in standards and specifications, Nigeria’s privately-owned DISCOs face an uphill task of meeting technical, operational, and financial performance goals. In the absence of adequate financial and capacity building inputs, the DISCOs face major issues in the operation, improvement, and maintenance of their respective distribution grids.

Power Africa’s previous program in Nigeria, the Power Africa Transactions and Reform Program (PATRP), worked closely with several DISCOs to reduce losses and improve operational and management performance; NPSP worked closely with this component of PATRP (prior to its closeout during this quarter) to define NPSP’s own program with the DISCOs.

NPSP has defined and implemented a concrete action plan regarding performance improvement work with Nigeria’s DISCOs. This plan includes the following steps:

1. Assess PATRP Interventions: Conduct assessments of the four DISCOs (Abuja, Eko, Ibadan, and Benin) that received support from PATRP. These assessments will indicate the success of the PATRP initiatives and will provide the basis for continuing support provided by NPSP.

2. Determine Additional DISCOs to Receive NPSP Assistance: Identify two additional DISCOs interested in receiving NPSP’s support and committed to performance improvement and conduct an assessment of their capabilities as well.

3. Develop and Help Implement Performance Improvement Plans: Use the above assessment results to develop performance improvement plans with these DISCOs, and help the DISCOs implement these plans.

In addition to these steps, NPSP is also working closely with the Association of Nigerian Electricity Distributors (ANED) to develop and deploy a training program for DISCO employees.


NPSP’s predecessor program in Nigeria, the Power Africa Transactions Reform Program (PATRP) worked closely with four of Nigeria’s 11 DISCOs, so our Distribution Team’s initial focus has been to assess the impact of this support to inform how NPSP will structure its own DISCO initiatives. To support this effort, over the past quarter NPSP finalized non-disclosure agreements with the Abuja, Eko, Ibadan, and Benin DISCOs regarding NPSP’s handling of the confidential information critical to the assessments.


With this milestone complete, the Distribution Team moved firmly forwards with conducting their assessments. The graph below illustrates the anticipated timeline for the team to complete all four of the assessments.

Figure 16. Completion Timeline for DISCO Assessments

The Distribution Team is tracking against its target deadlines for the assessments; notable progress includes the following:

• Abuja Electricity Distribution Company (AEDC): NPSP completed this assessment and has submitted the report for review. One of the main criticisms of the previous transformation plan is that it did not explicitly consult AEDC’s executive management prior to submission; to maximize goodwill, NPSP agreed to discuss the report with the AEDC executive management team before providing it to USAID. As a result, NPSP anticipates submitting the report to USAID during the next quarter for comments and review.

• Eko Electricity Distribution Company (EKEDC): NPSP completed the fieldwork required and has started drafting the Eko Assessment Report. Again, NPSP agreed to discuss the report with EKEDC’s executive management before providing the report to USAID. NPSP anticipates submitting the Eko Assessment Report to USAID during the next quarter for comments and review.

• Ibadan Electricity Distribution Company (IBEDC): NPSP subcontractor EMRC introduced the assessment’s objectives and approach in early January 2019, but the pending completion of federal and state elections delayed the deployment of EMRC’s appraisal teams. NPSP expects to complete the assessments and issue the report during the following quarter.

• Benin Electricity Distribution Company (BEDC): EMRC introduced the assessment’s objectives and approach in early January 2019, but the pending completion of federal and state elections delayed the deployment of EMRC’s appraisal teams. NPSP expects to complete the assessments and issue the report during the following quarter. Previous PATRP contractor TetraTech has secured a commercial contract with BEDC and is currently working on ground with their team. BEDC Management is currently not showing great interest in assistance from NPSP at this time.

In addition to these four DISCOs, NPSP has completed a preliminary assessment for six of the seven DISCOs that did not receive support under PATRP. The seventh DISCO, Yola, is currently undergoing re-privatization which will likely result in a significant change in management during the period of the intervention. As a result, NPSP did not find it appropriate to include Yola in this analysis because of the DISCO’s highly transitional period.

NPSP will discuss this report and its findings with USAID during the next quarter, where we hope to achieve consensus on the additional DISCOs NPSP will support throughout the duration of our program.


NPSP’s work regarding DISCO Performance Improvement Plans (PIPs) is slated to occur after conclusion of the initial assessments discussed in Outcome 4.01. The Distribution Team did, however, receive an opportunity to emphasize the importance of the PIPs at the end of the previous quarter, when ANED invited NPSP’s Off-Grid and Distribution Teams to present at ANED’s monthly Chief Executive Officer meeting held in Abuja on December 30, 2018.

In November 2017, ANED, in a collaboration with the French non-profit Cooperation, Industrial Development and Training (CODIFOR), produced a Training Needs Assessment for the DISCOs. This largely remains unimplemented although considerable work on developing agreed, acceptable certification standards for line workers and marketers is ongoing.

Outcome 4.03 intends to build on the work already undertaken by reviewing and updating the Training Needs Assessment produced by ANED/CODIFOR and to facilitate the provision of the identified training requirements through local training providers. ANED and NPSP have worked together to determine the current situation and the best way to proceed during this review period. Arrangements are underway to hold several half-day workshops in Abuja and Lagos to identify and/or confirm high-priority capacity and overall capability requirements.

As described in this report’s “Project Highlights” section, NPSP held its first capacity building workshop with AEDC on March 28, 2019 and will hold two additional workshops with Eko and Ikeja DISCOs during the upcoming quarter.

Outcome 4.04 is closely linked to Outcome 4.01, as the DISCO assessments will identify the weaknesses and issues that NPSP needs to address to develop and strengthen regulatory and shareholder governance frameworks in support of improved sector performance.

Initial results from the assessments of Abuja and Eko DISCOs suggest there is little empathy between NERC and the DISCOs. The DISCOs view NERC as imposing their political will and feel constrained in being able to respond, despite ANED publicly raising several issues in the past.

In respect to shareholder governance, the FGN is in the process of increasing government-appointed board members from one to three, although this requires the DISCOs (which are private companies) to amend their articles of association. There is concern this imposed change is likely to increase government “meddling” in the businesses, without providing any benefits to their overall management or governance. It is possible that the appointment of independent board member(s) could offset the impact of this change, so it is critical that the FGN chooses the right candidates with great care.


This quarter, NPSP’s Distribution Team drafted a Meter Asset Provider (MAP) procedure, which details the process that DISCOs must follow to fully implement the MAP Regulations 2018 issued by NERC. The Distribution Team intended to share this process guide with USAID and the DISCOs during this quarter; however, during discussions with the DISCOs for the assessments, NPSP uncovered information suggesting NERC introduced undocumented changes to the MAP Regulations 2018.

NPSP intends to discuss these changes with NERC to ensure that the MAP procedure accurately reflects their requirements, and the Distribution Team anticipates submitting the report for USAID review in April.

Distribution Successes and Lessons Learned

Progress on PATRP Assessments: NPSP’s Distribution Team is excited to have completed the AEDC assessment this quarter, as well as the fieldwork supporting the EKEDC assessment and the diagnostic study of Ikeja DISCO. This strong progress is a success the team will carry into the upcoming quarter.

DISCO Relationships: DISCO management are showing increasing interest and buy-in for NPSP’s initiatives and are impatient to start the implementation phase of the project. The Distribution Team has developed significant personal relationships within AEDC, Ikeja and EKEDC at the management, PMU and department head areas, enabling excellent discussions and information-gathering on their respective circumstances.

Lessons Learned: Experience shows that short-term assistance to the DISCOs by embedded advisors only works while the advisors are at the DISCOs. There is a demonstrable need for advisors to train and mentor all levels of management to engrain the changes introduced in the businesses’ operations if they are to be sustainable.

NPSP anticipates some resistance to change as it seeks to implement performance improvement mechanisms addressing shortcomings in business processes within the DISCOs. PATRP faced this same resistance but ultimately overcame it by working closely with DISCO staff to implement any changes to working practices. NPSP will model this approach to ensure DISCO buy-in and protect the sustainability of the initiatives.

Additionally, many of the business processes, procedures, or new working practices that PATRP developed have yet to receive DISCO approval and/or implementation. Even after agreeing on new initiatives, time is necessary for the DISCOs to formally approve and implement changes. NPSP will carefully monitor this approval process to prevent implementation from stalling.

Distribution Challenges to Achieving Results

Security Clearances to Access DISCO Premises/Sites: Deloitte’s Security Office has approved clearances to work at the head offices and surrounding areas of Abuja, Ikeja, and Eko DISCOs, which allows the Distribution Team to work with the DISCOs management team and to gather the necessary information to undertake the assessments. However, the Distribution Team is currently unable to travel to either the Ibadan or Benin DISCOs, presenting a challenge for completing the assessments. Deloitte’s Security Office is reviewing options for travel arrangements in hopes to secure a workable alternative for the work stream.

Capacity and Money: All DISCOs require various levels of assistance (most substantial) to meet the Power Africa goals for the five-year program. NPSP’s distribution work stream has limited resources to tackle such a bottomless requirement. The challenge will be determining what we can do to the most


benefit with what we have – NPSP intends to complete our initial assessments and then agree with USAID on the level of support and various interventions for the DISCOs.

Capital Expenditure Requirements: DISCOs require investment to upgrade, refurbish, and maintain the dilapidated distribution network infrastructure to reduce technical losses, reduce unplanned outages, and improve customer service. Combined, these actions should increase the amount of energy sold and improve the DISCOs’ collections efficiency through increasing customers’ willingness to pay.

Investments in replacing either stand-alone limited Information and Communications Technologies (ICT) systems, developed in-house by many DISCOs, or manual systems, where no ICT system exist, with modern, integrated ICT systems will improve the DISCOs’ overall ability to operate successfully and provide the management information essential to the management of the businesses. Amongst other benefits, these systems will enable the DISCOs to better manage their customer databases, thereby improving billings and collections, and reducing commercial losses together with improving network management to reduce technical losses. They will also enable the DISCOs to better manage their expenditures and, therefore, their overall cash management. The use of modern, integrated ICT systems will also allow the introduction of modern business processes critical to improving the overall performance of the businesses.

The Meter Asset Provider Regulations 2018 intends to transfer the capital costs of customer metering from the DISCOs to the MAP providers and, ultimately, customers. However, the regulations do not cover the costs associated with network metering, which is a crucial component in monitoring electricity flows through the distribution network and identifying locations of commercial losses. Investment in network metering, linked to investments through MAP in customer metering, will result in a reduction in commercial losses, improved billings/collections, and a reduction in commercial losses. Without mobilization of these investments in sequence with NPSP support, the project will have diminished overall gains.

NPSP is working with the World Bank and other donors to find solutions to the funding problem, such as performance improvement plans (PIPs) for DISCOs, designed to identify successive capital programs that will identify the investments funded by donors or otherwise, with PIPs including an added benefit of serving as a vehicle to force a tariff review.

Uncertainty Over Government Intentions for the Sector: There is currently considerable uncertainty over the FGN’s intentions for the sector and especially the future of the DISCOs. The promotion of eligible customers and under-grid, together with a proposal for sub-franchising and the ongoing freeze on tariffs, all threaten the financial integrity of the businesses and the willingness of investors to remain in the sector. The various external auditors for all the DISCOs have included concerns over the ongoing financial viability of the businesses in the Audited Financial Statements. NPSP’s proposed solution is to stay informed and connected, and to try to influence decision-making through the FGN/government agency relationships developed through NPSP’s Enabling Environment work stream.

Keep the DISCO Focused on a Long-Term Strategy Instead of Constantly Shifting Priorities: It is hardly surprising that with the numerous and often conflicting demands placed upon the DISCOs by their stakeholders, DISCO Boards and Executive Management teams tend to focus on short-term solutions to immediate problems instead of developing a long-term strategy for the business which would permanently address those issues. Only by having a long-term vision for the future development of the business, and by monitoring progress against this vision, will the Boards and Management Teams make truly strategic management decisions. NPSP will help with issue through our support for the development of the Performance Improvement Plans (PIPs) and strategically targeted support to DISCO Executive Management Teams.

Underfunding by FGN: FGN and its agencies’ (NERC/BPE/TCN/NBET) actions and future intentions toward the distribution sector pose a considerable challenge and threat to achieving the expected results. The continued underfunding of the sector means, for example, little or no investments in the distribution


network eliminating the possibility of reductions in technical losses or the introduction of ICT systems to improve the efficiency of the businesses. Continued distrust toward the investors is also influencing decision making with, for example, a belief that the investors are stealing money from the businesses to recover their investments adversely affecting decisions on much needed tariff increases.

NERC’s Challenge to Run the Sector: NERC’s inability to regulate the sector and its uninformed interference, often politically driven, in the operations of the businesses is a considerable challenge.

NERC’s imposition of the ambiguous MAP regulations is preventing DISCOs from acquiring meters, and the implementation of its Eligible Customer regulation will considerably reduce the DISCOs’ income, without a corresponding reduction in costs. NERC has not developed a mechanism to address this issue, which promises to exacerbate the DISCOs’ already poor financial situation.

To address this challenge, NPSP’s Distribution Team will work closely with our Enabling Environment Team to provide support to NERC to bolster its ability to regulate the sector.


ENABLING ENVIRONMENT

Technical Context

Many broad challenges contribute to the underperformance of the Nigerian power sector; issues with electricity policy, regulatory enforcement, gas supply, transmission constraints, and major power sector planning shortfalls have kept the sector from reaching commercial viability. Assurances required to give the private sector the appropriate signals that they can safely invest in the Nigerian power sector seem like distant aspirations.

NPSP’s Enabling Environment work stream will focus on partnerships with key FGN stakeholders to identify and implement the interventions that will create an enabling environment catalytic for the long-term development of the Nigerian power sector.

Power Africa recognizes that the development of an enabling environment, in which private enterprise can grow and flourish, underpins any form of sustainable long-term development. Thus, interventions to refine and improve Nigeria’s enabling environment to encourage private-sector investment will provide foundational support in the achievement of the Power Africa goals and longer-term FGN development goals.

NPSP’s technical activities work to address some of the foundational legal, regulatory, and policy issues that have held back sustainable development in the Nigerian power sector. NPSP designed these activities to reinforce three foundational themes:

• Increased Sector Transparency: Work with FGN entities to develop a strategy for legacy power sector privatization and enable a transparent framework for future public-private partnerships.

• Sector Planning and Coordination: Work with FGN stakeholders to address the current lack of long-term sector planning and implement mechanisms to sustainably enact some form of long-term planning.

• Improved Regulatory Environment: Assist NERC to develop and implement policy that will improve sector economics (cost recovery tariffs) and increase investment.

NPSP will provide technical policy support, public procurement, power sector planning advisory, and regulatory advisory expertise to promote the sound enabling environment required for the Nigeria’s long-term power sector sustainability.

Because of the presidential and gubernatorial elections taking place during this quarter, certain tasks requiring FGN counterpart collaboration and coordination slowed due to election uncertainty and responsivities of counterparts. The run up to the elections notably slowed the inputs and approvals on the terms of reference from both TCN and NERC. In TCN’s case, NPSP only received seven terms of reference at the end of February that NPSP had been collaborating with TCN on since November.


Progress Against the Work Plan

During the quarter, the team worked to finalize the eight End-to-End Sector Assessments. Assessments cover the full range of issues affecting the Nigerian power sector, including:

1. Sector Financial Assessment: This assessment analyzes historical financial flows through the power sector and works to quantify liquidity issues.

2. Technical System Operations Assessment: This assessment reviews current operational procedures and practice.

3. Long-term System Planning Assessment: Many of the issues facing the Nigerian power sector can be traced back to a lack of power sector planning. To understand these issues, the team developed an overall assessment looking at current planning processes in the Nigerian Electricity Supply Industry.

4. Electricity Legal and Enabling Environment Assessment: This assessment reviews the current macro issues that are constraining private-sector investment in the Nigeria power sector, as well as the legislation that forms the basis for the sector and its legal issues.

5. Gas Infrastructure and Policy Constraints: This assessment focuses on supply chain issues that currently constrain gas supply to the Nigerian power sector, as well as key policy issues, including the Petroleum Industry Governance Bill, constraining gas supply to the Nigerian power sector.

6. State of the Off-Grid Market: This assessment aims to develop a holistic review of the issues currently constraining the off-grid sector.

7. State of the Distribution Subsector: This assessment focuses on DISCOs at the center of the sector’s liquidity issues. The assessment aims to illuminate the issues facing DISCOs and light a path forward for NPSP and the sector more broadly.

8. Sector Political Economy Analysis: Given Nigeria’s complex political environment, and the upcoming presidential and gubernatorial elections, the team decided to conduct a political economy analysis to understand the political issues at play, and to ensure that donors can better navigate political issues within the Nigerian power sector.

NPSP shared early drafts with USAID for comment at the beginning of the quarter, and the NPSP team worked to revise and incorporate comments over the course of the quarter. By the end of the quarter, NPSP submitted five of the eight assessments to USAID in final draft form for comment and finalization. The NPSP team will work to finalize all eight assessments during Q2 and work with USAID to determine how best to share the lessons learned from the assessments with the power sector and the broader donor community.

Over the course of the quarter, NPSP’s Path to Impact Team worked with NPSP’s technical staff to develop an optimized portfolio of interventions to help the project to reach its aggressive targets of 3M connections and 10,000 MW of generation. As described in this report’s Project Highlights, in January, the Path to Impact Team traveled to Nigeria and led a NPSP strategy workshop to help the team to develop its overall strategy for Year 2 and beyond. Following the workshop, NPSP presented the overall approach to USAID in February. After the team agreed upon an overall approach and technical assistance framework, they are planning for a two-day donor coordination workshop in early April.


The team continued its support to audit NERC’s Multi-Year Tariff Order (MYTO) model. The initial review showed that the overall model was lacking real organizational structure, and data integrity. Over the course of the quarter, the NPSP team reviewed the model and authored an initial assessment detailing the issues identified with the model. In March, the team travelled to Abuja to work with NERC’s Markets, Competition, and Rates Team to understand the parameters for a more user-friendly MYTO model and user guide. During Quarter 3, the team will continue their analysis, revising the MYTO model and developing a user guide to accompany the model. This work will conclude with a workshop for NERC on the revised model and user guide.

Additionally, over the course of this quarter, NPSP worked with the NERC Chairman to shape his vision for a ‘tactical team’ that would track, benchmark, and manage organizational performance at NERC. NPSP is in the process of identifying and procuring the appropriate resources for the work and expects to mobilize resources during the upcoming quarter. Several other scopes of work including support for Meter Asset Provider program rollout and system planning have been in discussion with NERC and will recommence after elections.

The project deployed NPSP Utility Privatization Advisor, Mr. Art Sedestrom, in January to support the Bureau of Public Enterprise’s (BPE’s) Power and Post Privatization Directors in the five-year major post privatization review. Due to the political sensitivities surrounding the privatization, progress was slow in the lead up to elections.

Currently, there are questions how BPE will handle these reviews. There is clear consensus that BPE, NERC, and the Ministry of Power, Works, and Housing need to act, but they have made no clear decisions yet. It appears that the Nigerian government recognizes that neither they nor the private-sector counterparts have lived up to their sides of the privatization agreements set forth in the 2013 privatization.

As such, BPE is considering not conducting a formal review of the DISCO privatization and proceeding with negotiation of the performance improvement plans (or other alternatives) that will hold DISCOs accountable. As this work takes shape, the NPSP team will be prepared to support BPE decision making and mobilize appropriate resources.

During Q2, NPSP’s Enabling Environment Team met with the Permanent Secretary of Power to discuss the needs and priorities of the ministry. Much of the Permanent Secretary’s support requests related to transaction support, which NPSP’s On-Grid Generation Team will consider. The team also raised the prospect of supporting sector coordination and decision making which did not appear to be the current priority of the ministry. NPSP will resume these ongoing conversations in the upcoming quarter.


Enabling Environment Successes and Lessons Learned

During the quarter, the NPSP team made substantial progress towards developing a strategy framework to guide NPSP’s future work (Path to Impact) and to develop a firm baseline understanding of key sector issues that the project can share with other sector decision makers (End-to-End Assessments).

The team has continued to develop its relationships with decision makers in the Nigerian power sector, picking up several embedded advisors from the DfID and World Bank programs that are coming to an end.

Enabling Environment Challenges to Achieving Results

Over the course of Q2, the main challenge to OC3 was the uncertainty surrounding the pending presidential and gubernatorial elections. Post elections, the team is hopeful that sector stakeholders will be more willing to make the decisions needed to reform the Nigerian power sector.


CROSSCUTTING ACTIVITIES

Communications and Outreach

Several of NPSP’s partners featured program activities in their respective social media channels this past quarter.

All On’s “Power Solutions” Radio Program

As described in this report’s Project Highlights section, recurring partner All On asked NPSP’s Deputy Chief of Party (DCOP) to join CEO Wiebe Boer on a radio program titled “Power Solutions” on March 25, 2019, at 11 a.m. Hosted on Nigeria Info FM (99.3), the show aimed to increase public awareness of the off-grid power sector in Nigeria, specifically focusing on the renewable energy space and promoting the profile of key actors in the industry.

Mr. Gbajumo spoke about his experience in the sector and about NPSP’s work throughout the power value chain. As a result, listeners had a better understanding of NPSP and called in to ask questions such as if there is training for solar installations.

Prior to the radio program, All On shared a post on LinkedIn with its 765 followers promoting the program and noting the featured guest speaker, and posted throughout the program. In the figures to the right and below are some of the social media posts covering the radio program; All On also linked to video content here and here.

Figure 18. Social media posts from All On during Mr. Gbajumo’s radio appearance

Figure 17. Social media posts from All On during Mr. Gbajumo’s radio appearance

https://www.linkedin.com/feed/update/urn:li:activity:6515918215338692608

https://www.linkedin.com/feed/update/urn:li:activity:6515917033882951680


NPSP-REA Gender Workshop

As described in this report’s Project Highlights section and in the Gender section below, on February 5, 2019, NPSP and REA cosponsored a milestone workshop titled Amplifying Gender in the Energy Sector. The workshop focused on soliciting input and buy in from the participants, who REA and NPSP carefully selected. REA’s Communications Consultant, Credo Advisory, live tweeted the event, and several of the participants featured the event in their Twitter and LinkedIn pages, including NPSP’s Chief of Party (COP) Ms. Mary Worzala, NPSP’s Gender Advisor Ms. Jenine Jaradat, Solar Sister’s Training Manager Ms. Chioma Ome, and Credo Advisory’s CEO Ms. Awele Okigbo.

Figure 19. Social media posts from Credo Advisory and Solar Sister during the NPSP-REA Gender Workshop


International Women’s Day and REAN

The Renewable Energy Association of Nigeria (REAN) featured NPSP’s Off-Grid Advisor, Ms. Eme Kponu, as a “top woman” in the off-grid space in an email flyer distributed across REAN’s contacts for the 2019 International Women’s Day. NPSP has developed strong relationships with many of the women on the list, including key leadership from the Rural Electrification Agency and the leadership council from REAN.

Figure 20. NPSP Off-Grid Advisor, Ms. Kponu, Recognized During International Women’s Day

Gender and Social Inclusion

NPSP’s Gender Team had an impactful quarter, holding two successful events, wrapping up our gender mainstreaming through photography concept, and moving forward with key partnerships with GIZ and the Women’s Renewable Energy Network (WREN) for future programming.

NPSP-REA Gender Workshop

On February 5, 2019, NPSP and REA cosponsored a milestone workshop titled Amplifying Gender in the Energy Sector. The workshop brought together about 70 female professionals working in the energy space in Nigeria to discuss gender challenges in the sector as well as identify opportunities and make recommendations for the way forward. The sessions were interactive and dynamic, with many of the women sharing personal experiences and achievements.

Mary Worzala, NPSP’s Chief of Party, spoke about Power Africa and NPSP’s ambitious plans to increase generation of, and access to, electricity

Figure 21: NPSP Chief of Party speaking at the workshop


within Nigeria and across the continent. She underscored NPSP’s commitment to achieving gender parity, explaining that the sector cannot move forward without female professionals meeting the demand for the numerous skills it requires. Ms. Anita Otubu, Head of REA Special Projects, representing REA MD Damilola Ogunbiyi, presented REA’s achievements in the last 20 months, with a focus on the agency’s success in training and promoting women professionals. She highlighted that in under two years, REA senior management increased from one to six female professionals.

Fifty-five attendees participated in an electronically administered baseline survey capturing data on areas of competence, networks, gender discrimination in the workforce, and access to capacity building and mentorship opportunities.

Figure 22. Baseline Survey Results

NPSP and REA have pledged to implement some of the workshop recommendations which included a database of women in the sector, a mailing list for the exchange of ideas and opportunities, networking events, professional development training, mentorship program and technical support to female business owners.

Figure 23: Group photo of participants at the dynamic workshop

Photography Concept: Showcasing the Contributions of Women to the Energy Sector

To more accurately represent the Nigerian context, NPSP developed a bank of photographs taken in Nigeria that are available for use by USAID, Power Africa, and NPSP. The concept aims to bring women


who are making vital contributions within the sector to the limelight, generate a pool of quality pictures that can be used in the development of media materials and messages, and contribute to normalizing the depiction of Nigerian women doing non-traditional work by making photographs of women working in the power sector available for use by Power Africa, NPSP, and other stakeholders. The concept profiled two female lineworkers of the Eko DISCO.

Figure 24. Photographs of Women in the Energy Sector

NPSP’s Women’s Leadership Group

On February 4, 2019, NPSP conducted its first Women’s Leadership Group meeting, inviting about 20 women holding leadership positions in government, private sector, civil society, and donor institutions to attend the meeting. NPSP designed this group to create a forum for women in leadership positions throughout Nigeria’s energy sector to provide advisory feedback on NPSP’s programmatic initiatives and to bolster support for gender and social inclusion in the sector.

Ms. Whitney Jensen, Gender Advisor and Deputy Director of USAID Nigeria’s Program Office, delivered opening remarks to the group, with NPSP’s Events Coordinator, Ms. Mimi Ogunbowale, following with a presentation of NPSP’s Gender and Social Inclusion Plan. NPSP’s Gender Advisor, Ms. Jenine Jaradat, facilitated feedback from the audience following this presentation; salient points include the following:

• The Role of Government: FGN continues to be a key driver in the energy sector regardless of significant private-sector growth. As a result, NPSP should work closely with the FGN to help


facilitate women’s entry into the sector and seek to recruit women already within the FGN to support this effort.

• Opportunities for Entrance: If NEP and EEI grow at their targeted rates, these programs will catalyze US$1.5 billion in private-sector investment and generate a high demand for labor in the off-grid space, creating a natural opportunity to bring women into Nigeria’s energy sector. Private-sector developers are already interested in working with women but need guidance with recruiting and training programs.

• Convene Women Already in the Energy Sector: Many women are already involved in Nigeria’s energy sector but are not readily visible. Having a database of women would help with networking efforts, as well as facilitate recruitment and knowledge dissemination across a broad group.

Based on the recommendations from this meeting, NPSP is developing a countrywide database for women involved in the sector. NPSP plans to convene the next meeting of the Women’s Leadership Group in the following quarter.

Figure 25: Participants from the inaugural meeting of NPSP's Women's Leadership Group

Technical and Professional Capacity Development in Gender

NPSP identified prospective organizations to collaborate with toward building a pipeline of women to meet the labor demands of the energy sector. NPSP held a meeting with GIZ to ascertain their capacity and willingness to partner in providing technical training, certification, and mentorship for women in the sector. Discussions are still ongoing regarding this partnership. NPSP is also identifying prospective partners for professional skill development training for women in the energy sector. The period under review also achieved planning and preparations for an upcoming two-day networking and professional skill development event that will partner with the Women in Renewable Energy (WREN) Roundtable established by NPSP under REAN. The event will target young women (60%) and men (40%) who are interested in growing their networks and careers in energy.

Monitoring, Evaluation and Learning (ME&L)

NPSP is preparing to submit a third version of the Monitoring, Evaluation and Learning (ME&L) Plan in the upcoming quarter. This revised plan addresses feedback and comments on the second submission of the


ME&L plan provided by Power Africa and USAID on December 13, 2018. The requested changes, including adding new indicators and adjusting current indicators, required significant effort by NPSP to revise the ME&L plan and program activities. Table 3 presents a timeline of the comments and feedback between NPSP and Power Africa and USAID.

During this quarter, the ME&L Team, technical staff, and program leadership continued to review and revise the performance indicators, including the indicators’ baselines and targets, based on the feedback, comments and guidance from Power Africa and USAID. This required substantial time and effort across NPSP and was the primary task of the ME&L Team throughout Q2.

Table 3 presents the nine additional indicators added at Power Africa and USAID’s request. Table 4 presents the three indicators removed at NPSP’s request. Table 5 shows the current 20 indicators used by NPSP at the time of the writing of this report.

Table 3. Program Indicators Added at Power Africa/USAID’s Request Impact Indicators

1. Number of new grid and off-grid anticipated direct connections at financial close 2. Number of MW from transactions that have not yet achieved financial close 3. Number of MW that have been commissioned Outcome Indicators

4. Number of transactions that have not yet achieved financial close 5. Number of transactions that have been commissioned 6. New electricity capacity committed for regional trade through bilateral agreements 7. Total public and private funds leveraged by USG for energy projects Output Indicators

8. Utilization of risk mitigation tools by developers of Qualified Transactions 9. Number of strategic planning documents adopted, implemented, or revised

Table 4. Program Indicators Removed at NPSP’s Request Outcome Indicators Comments (Basis for Addition)

1. Market penetration by companies serving the off-grid solar market (percentage increase) due to USG assistance

Target results already measured by another indicator (Number of companies serving the off-grid solar market supported due to USG assistance)

2. Greenhouse gas (GHG) reduced, sequestered, or avoided due to USG assistance

Target results are calculated by Power Africa

Output Indicators

3. Number of institutions receiving technical assistance due to USG assistance

Target results are indirectly measured by other indicators and does not warrant a separate indicator

Table 5. Performance Indicators Impact Indicators

1. Number of new grid and off-grid anticipated direct connections at financial close 2. Number of new grid and off-grid actual direct connections 3. Number of MW from transactions that have not yet achieved financial close 4. Number of MW from transactions that have achieved financial closure due to USG assistance


5. Number of MW that have been commissioned Outcome Indicators

6. Number of transactions that have not yet achieved financial close 7. Number of transactions that have achieved financial closure 8. Number of transactions that have been commissioned 9. New electricity capacity committed for regional trade through bilateral agreements 10. Grid evacuation capacity (MW) of transmission system enhanced 11. Kilometers of power lines constructed or rehabilitated 12. Total technical and non-technical electricity losses / total electricity generated 13. Total public and private funds leveraged by USG for energy projects 14. Amount of investment mobilized for energy projects due to USG assistance 15. Distribution company payments to NBET and MO improved

Output Indicators

16. Utilization of risk mitigation tools by developers of Qualified Transactions 17. Number of laws, policies, regulations or standards to enhance energy sector governance

formally proposed, adopted or implemented as supported by USG assistance 18. Number of strategic planning documents adopted, implemented or revised 19. Number of people trained in technical energy fields due to USG assistance 20. Number of companies serving the off-grid market supported due to USG assistance

Key Accomplishments

While NPSP is still in its early stages of implementation and USAID has not formally approved the ME&L plan, we are able to report some performance indicator data. Table 6 below presents the initial program accomplishments.

Table 6: Performance Indicator Tracking (Based on Draft ME&L Plan Indicators)

# Indicator Baseline Y1 Target

Actual Achieved as of this Quarter

Total Achieved in

FY19 Completion

%

Breakdown (Q2 FY19)

2

Number of new grid and off-grid actual direct connections due to USG assistance

0 200,000 6,142 48,304 24%

• Off-grid (Q2) (4,553)4 o Mini-grids: 9 o (REA)

(3,526) o SHS (1,018)

• On-grid (Q2, 0) o N/A

4

MWs from transactions that have ACHIEVED financial closure (MW)

0 1.54 MWs 0.50 MWs 4.48MWs 291%

• Non-EEI o ICE Commercial:

0.50MWs

4 Total connections received and validated with source documentation; awaiting additional source documentation to validate the remainder (off-grid connections, 1589).


# Indicator Baseline Y1 Target

Actual Achieved as of this Quarter

Total Achieved in

FY19 Completion

%

Breakdown (Q2 FY19)

7

Number of transactions that have ACHIEVED financial closure

0 3 11 14 467%

• Off-Grid (Q2) o Mini-grids: 9 o SHS: 2

20

Number of people trained in technical energy fields due to USG assistance

0 210 234 329 157%

• REA (65) • Mini-grid (145) • SHS (0) • DISCOS (24)

21

Number of companies serving the off-grid solar market due to USG assistance

0 72 11 18 25%

• Off-Grid (Q2) o Solar Power:

3 o SHS: 0 o Hydro

Power: 8

NPSP’s number of direct connections might seem low compared to the connections that have been achieved from our work with the Rural Electrification Agency’s Energizing Economies Initiative. The ME&L Team will only report the connections where we have received and validated supporting documentation, such as sales trackers. The team is working closely with our Off-Grid Team to close the gap regarding the documentation and anticipates a significant increase in our total connections number when this effort concludes in the following quarter.

Ongoing Activities

During this quarter, the ME&L Team refine an Excel-based prototype data collection form developed in Quarter 1 and conducted the second project-wide data collection activity. The ME&L Team explored multiple options for a more automated and efficient data collection process, including the deployment of open-source online platforms, such as DHSI2 and Magpi. However, the complications caused by the varied guidance and feedback from Power Africa/USAID on the ME&L plan led the ME&L Team to suspend these efforts until Q3, or once USAID approves the ME&L plan.

The ME&L Team will continue to refine the data collection plan to align with updates to the ME&L plan. The plan sets a framework for collecting data on baselines, yearly targets and data sources for each indicator, by technical area. The plan also outlines methods of data collection, frequency, and other relevant information, such as critical dependencies, challenges, and assumptions. In developing the plan, the ME&L Team worked closely with technical staff to develop a process map outlining the sources, users, and flow of the data collection process for each indicator.

The ME&L Team also developed an initial database to store both quantitative and qualitative data. The team designed the database to be the data source for a data analysis and visualization tool. The ME&L Team will work toward developing this tool in Quarter 3. Collected and stored data is subject to a data quality assessment prior to its use for reporting and analysis purposes.

Environmental Status Report

NPSP resubmitted a revised draft of its Environmental Monitoring and Mitigation Plan (EMMP) on December 16, 2018, incorporating feedback from Power Africa and PATRP Advisors, specifically around defining the required screening processes relevant to the various transactions receiving NPSP support.


NPSP added a robust section to its third submission of its EMMP discussing the overall process for approving new transactions, delineating between early- and late-stage transactions according to Power Africa guidance, and describing the recurring screening requirements as transactions progress through their various maturity phases. The figures below illustrate the overall process for approving new transactions, as well as Power Africa’s definition for stages of transaction maturity.

Figure 26: NPSP and Power Africa Process for Approving New Transactions

Figure 27: Stages of Transaction Maturity

NPSP received comments from Power Africa on March 18, 2019, requesting additional edits after receiving feedback from USAID’s Senior Regional Environmental Policy Advisor & African Regional Mission Environmental Officer, Dr. Walter Knausenberger. NPSP also received the Power Africa 2.0 Project Appraisal Document (PAD) Initial Environmental Examination (IEE) during this feedback for the first time, which is currently under review for final USAID approval. NPSP is working to address the comments received and plans to resubmit the document for USAID approval in the upcoming quarter.


FINANCE AND ADMINISTRATION

OPERATIONS

During this reporting period, NPSP completed the activities related to the registration with the Corporate Affairs Commission. After the completion of the activities related to the office setup, during this quarter, NPSP completed the inventory of all its assets.

The Operations Team established relationships with additional hotels with discounted rates for lodging accommodations for NPSP staff in Abuja and Lagos.

During the reported period, NPSP completed the final activities in the implementation of its Anti-Human Trafficking Plan and provided its annual TIP compliance certification to USAID.

PROJECT STAFFING

During this quarter, NPSP received credential approvals for five expatriate advisors. The team has on boarded two of the five approved advisors. The other approved advisors will be onboarded early in the next quarter.

Through the Deloitte Nigeria firm, NPSP on boarded 13 additional local staff members. The nine resources are part of OC 2, OC 3, OC 4, and Crosscutting Teams. The team of local staff members has increased by 80% from the previous quarter.

SUBCONTRACTS

To date, NPSP has engaged proposed subcontractors in the following ways:

• CrossBoundary: CrossBoundary had Task Order (TO) #3 fully executed

• Deloitte Nigeria: NPSP executed two modifications for TO #2, which enabled to enroll several new local staff members

• Manitoba Hydro International (MHI): MHI continued to perform NPSP work under TO #1

• McKinsey: NPSP began conversations with McKinsey regarding TO #2, which we anticipate finalizing in the upcoming quarter

• Nextier: NPSP executed the Indefinite Delivery Indefinite Quantity (IDIQ) subcontract agreement and TO #1

• Energy Market and Rates Consultants (EMRC): NPSP started to work with some EMRC staff to support the distribution work stream

• ANED: NPSP continued the subcontracting process for support to the distribution work stream; overall subcontract value is still being determined

• Power for All: NPSP initiated the subcontracting process; overall subcontract value is still being determined

• Gas Strategies: NPSP executed the subcontract for support in the gas work stream

• Odyssey Energy Solutions: NPSP initiated the process to issue an IDIQ

• Professional Global Solutions: NPSP executed TO #2 in support of project staff activities in Lagos


APPENDIX A: NPSP ORGANIZATIONAL CHART


APPENDIX B: TECHNICAL DELIVERABLES SUBMITTED OVER QUARTER

OC Deliverable Title Deliverable Description

Sub-contractor

Initial Submission

Final Submission

COR Accept

Outcome 2

2 Baseline Report Establishing the current baseline of SHS/mini-grid penetration

CB 19-Dec-18 28-Feb-19 7-Mar-19

2 Strategies for Off-Grid Expansion

Go-to-market/expansion strategy documents for SHS and mini-grid companies. NPSP will disseminate the document via appropriate channels (e.g. capacity building workshops)

CB 2-Jan-19 28-Feb-19 7-Mar-19

2 Year 1 Pipeline Year 1 Off-Grid Project Pipeline with a potential to contribute 500,000 new connections

CB 19-Dec-18 28-Feb-19 7-Mar-19

2 Off Grid Capital Map

Conduct off-grid sector investment activity analysis, relying heavily on existing materials and filling in gaps where needed

CB 19-Dec-18 28-Feb-19 7-Mar-19

2 Value Chain Mapping

Cost-Effectiveness Analysis for Energy Access, across the value chain

CB 15-Mar-19 15-Mar-19 2-Apr-19

2 Value Chain Mapping

Cost Benchmarking tool to be integrated with platforms such as Odyssey

CB 15-Mar-19 15-Mar-19 2-Apr-19

2 Market Intelligence Report

A market intelligence report covering key aspects of the market, including lessons learned from existing projects, upcoming tenders and other opportunities

CB 19-Dec-18 In progress

2 February Milestone Report from CrossBoundary

Quarterly reports on progress of targeted support and opportunity engagement, including number of projects that have received advisory

CB 28-Mar-19



Sub-contractor

Initial Submission

Final Submission

COR Accept

services, and number of projects that have committed financing (measured by LOI/MOU/term sheet)

Outcome 3

3 End to End Sector Assessment

Sector financial assessment tracing cash and electricity through the Nigerian power sector to illuminate liquidity issues faced by DISCOs, GENCOs, and FGN entities

N/A 22-Dec-18 In progress


Analysis of technical system operations (T&D), identifying areas for improvement and key bottlenecks

N/A 27-Feb-19 In progress


Electricity policy enabling environment assessment including ongoing efforts to address challenges



Gas policy gap analysis & gas-to-power supply chain review to identify challenges and opportunities and assess how they can support Power Africa goals



Legal framework analysis - combined with Enabling Environment



Long term planning capacity, mechanisms, opportunities, and impacts assessment



Sector political economy analysis to understand the structure of the sector and key decision makers

Nextier

In progress


State of the Distribution Subsector

EMRC 22-Dec-18 In progress



Sub-contractor

Initial Submission

Final Submission

COR Accept


State of the Off-Grid Market N/A 22-Dec-18 28-Mar-19

3 MYTO Audit Model

Audit of MYTO model N/A 8-Mar-19 In progress

3 MYTO Audit Model

Model gap analysis with recommendations

N/A 8-Mar-19 In progress

3 Power Africa Nigeria National Power Project Roadmap to 10GW (Path to impact)

On-grid generation & transmission intervention transaction mapping, with targeted analysis of key constraints and opportunities for support to projects in development (mapping current and planned donor assistance)


3 Power Africa Nigeria National Connections Roadmap to 3M Connections (Path to Impact)

Off-grid sector mapping, with targeted analysis of key constraints and opportunities for support new connections and improved service (mapping current and planned donor assistance)



APPENDIX C: SUMMARY OF TECHNICAL CHALLENGES

Challenges Encountered (Generation)

Solved or Outstanding Proposed Solutions

OUTCOME 1: PRIVATE-SECTOR INVESTMENT IN GAS SUPPLY, POWER GENERATION, AND TRANSMISSION

Power Sector Illiquidity: The inability of GENCOs to pay gas invoices reliably

Outstanding • Provide transaction assistance and support to the GENCOs through a sustained relationship with the Association of Power Generation Companies (APGC) in order to proffer recommendations on ways to address liquidity issues

Foreign Exchange Risk: Gas supply agreements are denominated in U.S. dollars while the remainder of power-side agreements (PPAs and vesting contracts) are denominated in Naira

Outstanding • Look at international examples of countries that both export gas and use it domestically to come up with an innovative solution tolerated by both sides

Electricity Market Liquidity: Magnitude of losses in the electricity market has grown to the point that NBET remits only 30 percent of invoices.

Outstanding • Conduct end-to-end sector assessments to help identify gaps, assess opportunities for support, and develop an approach that can help resolve sector issues

• Support to the NERC in developing and implementing a cost-reflective tariff

NBET Interim Agreement for Power Purchase: Decision by NBET to issue an interim (energy-only) PPAs

Outstanding • Conduct end-to-end sector assessments to help identify gaps, assess opportunities for support and develop an approach that can help resolve sector issues


Scarcity of Capital: Closing of NIPP transactions requires US$5.6 billion and the 11 DISCOs are in dire need of financing to implement loss reduction projects

Outstanding • Conduct end-to-end sector assessments to help identify gaps, assess opportunities for support and develop an approach that can help resolve sector issues


OUTCOME 2: FACILITATE NEW OFF-GRID CONNECTIONS TO CLEANER POWER SUPPLY

Lack of an Enabling Environment: high-duty/VAT structure with importers paying 15%–25% in duties and other tariffs

Outstanding • Devote a dedicated task-force drawn from the members of the sector including developers and contractors

Agent Banking/Pricing: Currency devaluation has negative impact on the cost of SHS products which passes on to customers who are price sensitive

Outstanding • Develop strategies that would mitigate timelines and costs associated with


Transaction Costs in Payment Processing are a Challenge for PayGo Solution Providers

Outstanding • Write a white paper on a common infrastructure for payment processing with an aim to reduce such transaction costs.

OUTCOME 3: IMPROVED ENABLING ENVIRONMENT FOR PRIVATE-SECTOR PARTICIPATION IN THE POWER SECTOR

Uncertainty Surrounding the Pending Presidential and Gubernatorial Elections

Solved • Elections have been determined, team plans to work with stakeholders to make decisions needed to reform power sector

OUTCOME 4: IMPROVED LIQUIDITY TO ENABLE NEW GRID CONNECTIONS

Security Clearances to access DISCO premises/sites: Approved clearances to work at the head offices of Abuja, Ikeja, and Eko DISCOs but not Benin and Ibadan

Outstanding • Review of travel arrangements to Benin and Ibadan DISCOs underway

Capacity and Money: Distribution workstream has limited human resources to tackle broad problem

Outstanding • Agree with USAID on the level of support and various programs for NPSP to undertake

Capital Expenditure Requirements: DISCOs require investment to upgrade, refurbish and maintain the distribution network infrastructure

Outstanding • Work with donors to find solutions to the funding problem, such as PIPs for DISCOs

Keep the DISCO Focused on a Long-Term Strategy Instead of Constantly Shifting Priorities

Outstanding • Support the development of the PIPs and DISCO Executive Management teams

NERC’s Challenge to Run the Sector: The inability of NERC to regulate the sector and its uninformed interference, often politically driven

Outstanding • Provide support to NERC to bolster its ability to regulate the sector


APPENDIX D: YEAR 1 WORKPLAN TABLES

The tables in this appendix capture revisions to planned activities and deliverables in the Year 1 Workplan. Changes will be made in consultation with USAID during scheduled meetings.

Indicates a discrete deliverable within an activity

Activity NPSP Activity Lead(s)

Start - End Date

Reasoning/

Buy-in

Linkages Deliverable(s)

OUTCOME 1: PRIVATE-SECTOR INVESTMENT IN GAS SUPPLY, POWER GENERATION, AND TRANSMISSION

Develop a Strategy to Increase Access to Capital in Generation and Transmission (CAPEX and OPEX)

OC1.01.01

Douglas Hinrichs

08/13/18 – 04/26/19

Best practice/to inform other OC1 activities

OC1.02

OC1.03

OC1.04

OC1.05

OC3.01

OC3.02

OC3.03

a. On-grid capital map

b. Access to capital strategy report that details de-risking investments in generation and transmission projects and improves the flow of knowledge and capital (deal presentation to investor, availability of a pipeline of projects, and credit enhancements)

c. Electronic and actual investor forums to connect potential investors with developers using lender criteria

NPSP Targeted Transaction Assistance Plan which can feed into the Path to Liquidity

OC1.01.02

Douglas Hinrichs

11/12/18 – 02/22/19

Best practice/to inform other OC1 activities

OC1.02

OC1.03

OC1.04

OC1.05

OC3.01

OC3.02

OC3.03

a. Prioritization process and list of existing and developing gas and renewable generation and transmission transactions based on impact, timeliness, and viability to achieve NPSP objectives (including an updated transaction database and expected timing for support)

b. Identification of the type of needed support and implementers of support (including crosscutting activities)

Stakeholder validation and alignment

OC1.01.03

Douglas Hinrichs

08/13/18 – 02/22/19

Best practice

OC1.02

OC1.03

OC1.04

OC1.05

OC1.06

a. Donor–FGN roundtable to validate focus of support activities (if not appropriate, these might be a series of bilateral meetings)

b. Governance model to transparently track progress (for sector performance management and Power Africa Monitoring and Evaluation)

Advisory support to NDPHC for the

Privatization Adviser (Amaka Onwuli)

09/03/18 – 09/30/19

Extension of critical advisory support under

OC1.01 a. Finalized gas supply agreements with prospective gas suppliers for each of the power plants


privatization of the NIPPs

OC1.02.01

PATRP to NDPHC

b. Negotiated and completed PPAs with NBET and/or eligible customers

c. Tariff negotiations with NBET and NERC for the NIPP power plants completed before assets are handed over to preferred bidders

d. Finalized GCA with TCN e. Record of ongoing advisory

support on the privatization sale proposal5

Advisory support to NDPHC Transmission Team for development of ongoing projects

OC1.02.02

Privatization Advisor (Amaka Onwuli)

02/22/19 – 09/30/19

NDPHC Request (Extension of critical advisory support under PATRP)

OC1.01

OC1.06

OC3.04

OC3.05

a. Record of ongoing advisory support for the project monitoring committee related to the completion of NDPHC Lot 18(T) Ikot Abasi – Ikot Ekpene 330kv Double Circuit Transmission Lines to endeavor that timelines are met, and the project is completed as agreed upon

b. Record of ongoing advisory support in the negotiation of the joint development agreement between Black Rhino and NDPHC

c. Record of provided ad hoc support to project monitoring committees on an ongoing basis as needed to endeavor that timelines are met, and the project is completed as agreed upon

Advisory support to NDPHC for resolution of existing Calabar risk exposure

OC1.02.03

Privatization Adviser (Amaka Onwuli)

09/03/18 – 09/30/19

NDPHC Request (Extension of critical advisory support under PATRP)

OC1.01 a. Negotiated reduction of the existing (80/20) take-or-pay contract obligation currently in the Calabar GAS to 60/40 in order to reduce the significant financial obligation to NDPHC for the Calabar plant

b. Negotiated amendment to the existing quarterly take-or-pay reconciliation period in the GSA for Calabar plant to an annual reconciliation in order to reduce the financial exposure to NDPHC and promote use of the gas quantities

c. Completed project viability analysis of the eight NIPP power plants to

5 The current proposal anticipates that the preferred bidders will make an initial payment of 30% of the sale value representing the “Initial Payment” after the execution of the GSA and confirmation of adequate supply of gas within a specific period of time, PPA tied to the PPA presently in place with NDPHC that would be acceptable to the buyer, execution of an escrow agreement, and execution of the shareholders’ agreement, in case less than 100 percent (i.e., 80%) of the shares are sold.


determine their economic feasibility through a least-cost lens, depending on data availability

Development of GENCO financing initiatives OC1.03.01

Douglas Hinrichs

02/22/19 – 09/30/19

Financing in place prior to execution of GENCO refurbishment and turnarounds

OC1.01 a. Prioritized list of GENCOs for support based on impact, timeliness, and viability

b. Business case for prioritized GENCO refurbishments and operational PIPs by identifying and developing financing initiatives to resolve funding gaps

Advisory support to the Bureau of Public Enterprises to develop mechanisms/processes to enforce GENCO performance commitments (Stage 1) OC1.03.02

Robert Kremer

03/04/19 – 09/30/19

Best practice

OC3 a. Record of ongoing advisory support to develop the mechanisms, structure, and processes for post privatization commitment enforcement at BPE

Advisory support to NBET to facilitate and develop the competitive procurement process for additional generation capacity OC1.04.01

Douglas Hinrichs

03/04/19 – 09/30/19

Best practice

OC1.01

OC3.02

a. Developed EOI and RFP documents for the competitive procurement process based on recognized models, including South Africa’s Renewable Energy Independent Power Producer Procurement Program

b. List of selection criteria for and list of final awardees in NBET’s bid selection process

Advisory support to the MoF and NBET in the finalization of the PCOAs OC1.04.02

Douglas Hinrichs

03/04/19 – 09/30/19

Clear critical roadblock for existing transactions

OC1.01

OC3.03

a. Final language for the PCOA that would be suitable for both FGN and existing project developers

b. Negotiated and finalized PCOAs with solar developers so that they can raise financing

Advisory support to NBET and private-sector developers on the development and finalization of key industry agreements OC1.04.03

Douglas Hinrichs

08/15/18 – 09/30/19


OC1.01 OC3.03

a. Provide ongoing advisory support to NBET on the bankability of its industry agreements (PPAs)

b. Engage the AfDB and applicants on PRG documents

c. Finalized key industry agreements, including PPAs, SSAs, and GCAs provided to IPP project developers, with a focus on priority projects

Technical assistance to credit enhancement providers

Cole Johnson

03/04/19 – 09/30/19

Clear critical roadblock for existing

OC1.01 a. Provide ongoing advisory support to local credit enhancement providers, such as InfraCredit and Ecobank Nigeria, on facilitating local


OC1.04.04 transactions

currency partial risk guarantees for prioritized power generation projects (in collaboration with the Development Credit Authority)

Advisory support to state-level public sector-embedded power programs OC1.04.05

Robert Kremer

09/17/18 – 09/30/19


a. Provide ongoing advisory support to Lagos State Embedded Generation model, which may include replicable elements, such as cost-reflective tariffs, enforceable collections, and enhanced power reliability to across other states

Develop a Nigeria gas-to-power program, including a gas transaction support plan based on gas-to-power diagnostic and community electricity from captured flare gas (OC1.01) OC1.05.01

Senior Gas Transaction Adviser

02/22/19 – 09/30/19

This market is underdeveloped based on the availability of natural gas, flare gas, and generation assets

OC1.01 OC3.01 OC3.02

OC3.03

a. Prioritized gas transactions for support based on supply surety, impact measure by capacity, timeliness, and project viability, provided by gas supply and generation advisers

b. Targeted technical assistance on GSA to approximately 18 of the 26 thermal power plants that do not have activated GSAs in place

c. List of capital optimization capabilities, vehicles, and implementers, which could facilitate effective project delivery

d. Prioritized list of potential stakeholders and processes by which they could add technical veritas to a broader national roadmap process

Nigeria gas-to-power program stakeholder engagement and validation OC1.05.02


02/22/19 – 09/30/19

Stakeholders need to be engaged to solicit feedback on proposed activities for greater buy-in and efficacy

OC1.01 OC3.01

OC3.03

a. Conduct stakeholder consultations as the Nigeria gas-to-power program is developed, including direct consultations with power plants to identify promising approaches for gas infrastructure development (contract issues, access to financing, etc.)

b. Implementation updates through execution of a Nigeria gas-to-power program

Identify and assess feasibility of larger scale flare gas-to-power projects OC1.05.03


02/22/19 – 09/30/19

This currently untapped resource could be used to provide energy to unserved communities in the Niger Delta region

OC2 a. Assessment report on flare gas-to-power potential in Nigeria, based on global best practices and existing publications (e.g., from the World Bank’s Global Gas Flaring Reduction Partnership)

b. Prioritized list of pilot opportunities for flare gas-to-power projects in Nigeria, identifying areas of potential targeted transaction assistance


Design a program of development partner and alternative transmission transaction business models to attract private-sector investments OC1.06.01

Robert Kremer

08/20/18 –04/26/19

Current transmission funding in Nigeria is insufficient; TCN will require a great deal of private-sector investment to evacuate stranded generation assets and to extend lines for increased access to energy

OC3.05 OC1.06

a. Development Partner Transmission Funding Report

b. Based on recommendations coming from intervention 3.05, assess transmission investment business models that attract private-sector capital

c. Assess applicability of already developed transmission tariff, developed by PATRP, and work with public counterparts to facilitate adoption of the tariff

d. Assess current and potential future functions and funding for TCN’s market and system operator

Design a TCN project financing program OC1.06.02

Robert Kremer

02/25/19 – 09/30/19

TCN will need technical assistance in screening likely projects and assisting developers in project financing as well as substantial capacity building.

OC3.05 a. Provide ongoing advisory support, capacity building, and transaction assistance to priority projects

OUTCOME 2: FACILITATE NEW OFF-GRID CONNECTIONS TO CLEANER POWER ENERGY SUPPLY

Coordinate activities of key off-grid stakeholders

OC2.01.01

M.K. Balaji Eme Kponu

Monthly Reduce duplication of efforts and arrive at synergies

OC2.01 OC2.02 OC2.03 OC2.04

OC2.05

a. Convene at least one stakeholder meeting per quarter

b. Support to convene high-level public, private, and donor off-grid stakeholders to ensure consensus and buy-in as applicable to NPSP

Conduct off-grid sector current state analysis, relying heavily on existing materials and filling in gaps where needed

OC2.01.02

M.K. Balaji 08/09/18 – 11/30/18

Sector in need of aggregation of existing research with gaps in knowledge filled to help inform approach to all interventions

OC2.02 (b)

a. Brief study on donor activities, including identification of synergies and gaps

Advisory support to the REA in project management of mini-grids project

McKinsey

(Deloitte/CrossBoundary in support)

08/09/18 – 11/14/18

Establish program outcome metrics, assessment of data needs and methodolo

a. Summary of review of REA existing project implementation infrastructure and its effectiveness as related to Power Africa’s Indicator List


implementation Part A: Set up an operating structure to support implementation

OC2.01.03

gy for hosting, identification of institutional infrastructure within REA to support the program and create a stakeholder engagement plan

b. Develop project implementation unit (PIU) design with REA input

c. List of data needs and a data collection and hosting methodology

d. Stakeholder engagement plan, with REA input

Advisory support to the REA in project management of mini-grids project implementation Part B: Tracking and implementation support for Phase I projects under the Energizing Economies Initiative

OC2.01.04

McKinsey (Deloitte/CrossBoundary in support)

09/17/18 – 02/01/19

Support REA with project execution

a. Complete set of data on Phase 1 projects such as market study, feasibility, connection types/details, etc.

b. FAQs and other templates developed for supporting project developers in their engagement with investors

c. Development and integration of project management tracking and reviewing mechanisms into the PIU, coordinated with the existing REA engagement on the platform

Advisory support to the REA in project management of mini-grids project implementation Part C: Build capacity of the REA

OC2.01.05

McKinsey


09/17/18 – 03/01/19

Ensure institutionalization of project implementation tools/processes within REA PIU

a. Summary of organizational changes (structure, tools, processes) required for implementing the PIU design

b. Delivery of training to PIU staff on the tools/processes developed as a part of PIU design

c. Report on REA PIU readiness to carry forward implementation support after project completion

Advisory support to the REA in project management of mini-grids project implementation Part D: Preparation for execution of Phase 2 projects

OC2.01.06

McKinsey


03/04/19 – 03/15/19

Support REA in analyzing Phase 1 projects and strategic planning for next phase

a. Report on lessons learned from Phase 1 projects and implications/changes required for Phase 2 projects

b. Make changes to the 22-step process for project implementation based on learnings from Phase 1— includes refining approach, providing standardized templates, etc.

c. Transfer PIU management to REA to enable further scale-up

d. Develop a methodology for identification of priority sites for Phase 2

Advisory support to the REA’s SHS and

M.K. Balaji Eme Kponu

08/09/18 – 11/30/19

Enable REA to issue grants to SHS and

a. Develop a manual and toolkit for REA to perform due diligence on SHS and mini-grid companies prior to issuing


mini-grid activities

OC2.01.07

(McKinsey/ CrossBoundary in support)

mini-grid companies in catalytic way

grants and train them on the use of the tools

b. Technical assistance to SHS and mini-grid companies as they prepare applications for grants from the REA

Conduct off-grid sector investment activity analysis, relying heavily on existing materials and filling in gaps where needed

OC2.02.01

CrossBoundary

08/09/18 – 11/30/18

Sector in need of aggregation of existing research with gaps in knowledge filled to help inform approach to all interventions

OC2.02 (b)

a. Off-grid capital map

Develop a broadly applicable risk framework based on lessons learned from transaction and strategic advisory in the off-grid sector

OC2.02.02

CrossBoundary

04/01/19 – 09/30/19

Broad impact for off-grid developers and investors with relatively low cost for light-touch engagement

OC2.03 OC2.04

a. Risk framework that developers can use to mitigate risks in project execution and fundraising; this will be integrated into existing platforms (e.g., Odyssey in a user-friendly format)

Determine costs across the value chain effective approach to energy access and develop strategy for reduction of costs

OC2.02.03

CrossBoundary

11/01/18 – 03/01/19

Conduct investment in energy access is in a cost-effective way

a. Value chain transaction map

b. Cost-benchmarking tool to be integrated with platforms, such as Odyssey

Develop pipeline of off-grid solar projects for support consideration OC2.03.01

CrossBoundary and Deloitte

08/09/18 – 10/26/18

Proposes when, how, and for whom the team will provide TA and TTS

OC2.03.02

a. Year 1 off-grid project pipeline with a potential to contribute 500,000 new connections

Provide strategic advisory and targeted support to priority engagements, as arrived through the project evaluation methodology OC2.03.02

CrossBoundary

Ongoing Provide services that advance projects that are catalytic to the off-grid sector

OC2.03.01

a. Engagement tracker (updated regularly as needed—can be requested at any time)

b. Quarterly reports on progress of targeted support and opportunity engagement, including number of projects that have received advisory services, and number of projects that have


committed financing (measured by LOI/MOU/term sheet)

c. At least 20 companies under transaction or strategic advisory support

d. Minimum of eight engagements executed leading to at least 100,000 new connections

Develop go-to-market strategies and market expansion strategies for entering and existing companies

OC2.04.01

CrossBoundary

08/09/18 – 09/30/19

Support companies to launch in new markets in a way supportive of NPSP goals

a. Go-to-market/expansion strategy documents for SHS and mini-grid companies to be disseminated via appropriate channels (e.g., capacity building workshops)

b. Establishing the current baseline of SHS/mini-grid penetration

c. Outline market growth strategies to achieve in line with the ME&L plan, starting with 5% growth in the year under consideration

Develop tools for facilitation of partnerships, project assistance and monitoring, and marketing of progress

OC2.04.02

M.K. Balaji 08/09/18 – 09/30/19

Provide USAID with tools to explain and justify activities of program

a. Work with existing platforms such as Odyssey to expand their features so that they are able to monitor the project pipeline

Develop a market intelligence report for the off-grid sector, as a guide for US-based companies interested in the sector

OC2.04.03

M.K. Balaji 08/09/18 – 09/30/19

Provide US-based companies support for market entry to Nigeria

a. A market intelligence report covering key aspects of the market, including lessons learned from existing projects, upcoming tenders, and other opportunities

Support recognition of quality standards based on international best practices

OC2.05.01

M.K. Balaji Kyle Lundin

(CrossBoundary in support)

08/09/18 – 11/30/18

Increase consumer confidence in sector

OC2.02 (b)

a. Identification of various standards existing today in Nigeria

b. Identification of an appropriate list of standards to be followed (technical, project execution, and vendor qualifications)

c. Identification of processes/authority for certification

d. Identification of capacity building requirements and a roadmap for a quality assurance framework

OUTCOME 3: IMPROVED ENABLING ENVIRONMENT FOR PRIVATE-SECTOR PARTICIPATION IN THE POWER SECTOR


End-to-end sector assessment OC3.01.01.01

Colin McCollester

09/01/18 – 11/21/18

Necessary to identify the historical disconnects in the power sector and prioritize support

All a. Sector financial assessment tracing cash and electricity through the Nigerian power sector to illuminate liquidity issues faced by DISCOs, GENCOs, and FGN entities

b. Analysis of technical system operations (T&D), identifying areas for improvement and key bottlenecks

c. Electricity policy enabling environment assessment including ongoing efforts to address challenges

d. Gas policy gap analysis and gas-to-power supply-chain review to identify challenges and opportunities and assess how they can support Power Africa goals

e. Legal framework analysis—review of power sector actors’ statutory responsibilities and mandate enforceability and key legal issues affecting the sector

f. Long-term planning capacity, mechanisms, opportunities, and impacts assessment

g. Sector political economy analysis to understand the structure of the sector and key decision makers

Sector enabling environment measurement and prioritization framework

OC3.01.01.02

Colin McCollester

11/01/18 – 01/15/19


All a. Framework for measuring impact and prioritizing future enabling environment support

b. Ranked list of enabling environment initiatives with justification for planning purposes

Assessment of current development partner activities in the power sector and opportunities for coordination

OC3.01.01.03

Colin McCollester

09/15/18 – 10/15/18


All a. Map of development partner support in Nigerian power sector

b. Assistance gap analysis for recommendation for coordination and realization of synergies


NPSP National Power Project Roadmap to 10GW (Path to Impact)

OC3.01.02.01

Doug Hinrichs

09/01/18 – 11/21/18

Best practice/to inform transaction support and enabling environment activities (and coordinate donor activities)

OC1.02

OC1.03

OC1.04

OC1.05

OC3.02

OC3.03

a. On-grid generation and transmission intervention transaction mapping, with targeted analysis of key constraints and opportunities for support to projects in development (mapping current and planned donor assistance)

b. Prioritization of transactions for support to achieve project objectives (including an updated transaction database)

c. Prioritization of existing IPPs and GENCOs for support to achieve Power Africa objectives (including expected timing for support)

d. Communication and coordination meetings with donor working group

NPSP National Connections Roadmap to 3M Connections (Path to Impact)

OC3.01.02.02

M.K. Balaji 09/01/18 – 11/21/18

Best practice/to inform transaction support and enabling environment activities (and coordinate donor activities)

OC2.01

OC2.02

OC2.03

OC2.04

OC2.05

e. Off-grid sector mapping, with targeted analysis of key constraints and opportunities for support new connections and improved service (mapping current and planned donor assistance)

f. Prioritization of support to achieve project objectives (including a Y1 off-grid sector approach)

g. Prioritization of existing developers and SHS distributors to support in order to achieve project objectives

h. Communication and coordination meetings with donor working group

Technical analysis of market operations monitoring capabilities

OC3.02.01

NERC Relationship Lead and Colin McCollester

09/01/18 – 12/15/18

Support NERC in evaluating options for unbundling

OC1.06

OC3.05

a. Audit of system monitoring capabilities and recommendations for improvement

MYTO model audit

OC3.02.02


10/01/18 – 03/01/18

Tariff reform is a key issue holding back the Nigerian power sector. WB has indicated interest in assisting. Project will coordinate with other TA providers.

OC4 a. Audit of MYTO model

b. Model gap analysis with recommendations

c. Workshop to socialize findings with NERC stakeholders

TCN tariff audit

NERC Relationship Lead and

03/01/19 – 07/01/19

NERC indicated a strong

OC1.06 a. Audit methodology


OC3.02.03 Colin McCollester

need to review TCN asset base and overall tariff

b. Support audit of TCN asset register

c. Workshop to socialize findings with NERC and TCN stakeholders

Strategic communications support

OC3.02.04


Ongoing Coordination in the sector is a major shortfall, assisting NERC to communicate its mandate will take steps to encourage better coordination

OC4 a. Communication strategy identifying strategic priorities and coordination points

b. Assistance with strategic DISCO communications

c. Assistance with strategic intergovernmental communications (TCN, NBET, and MoPWH)

Competitive transition charge (eligible customer program)

OC3.02.05


10/01/18 – 03/01/19

Requested by NERC

OC1

OC 3.02 (b)

a. Market study to review DISCOs’ compensation for use of their assets under the program

Benchmark PPA tariffs model by technology

OC3.02.06


10/15/18 – 03/01/19

Requested by NERC

OC1

OC 3.02 (b)

a. Review current tariff setting process for various technologies

b. Support development of tariff models for new technologies, such as LPG

Targeted TA and capacity building

OC3.02.07


Ongoing NERC’s capacity to enforce its mandate will be a long-term determinate of sector development

a. Training needs assessment for NERC personnel

b. SME support, training modules, or twinning support on topics identified by NERC leadership and/or embedded NARUC adviser

c. Targeted long-term planning support

Meter asset provider pricing benchmark

OC3.02.08


11/01/18 – 02/01/19

Ensure NERC’s ability to effectively implement the MAP program

OC4 a. Support to benchmark market prices to assist NERC in reviewing MAP applications

Support BPE to implement the mid-term review of privatization performance agreements

OC3.03.01

BPE Relationship Lead and Peter Graham

09/30/18 – 03/31/19

Build BPE’s capacity to conduct mid-term privatization reviews

OC4.04 a. Mid-term review plan

b. Inputs (KPIs, benchmarks) to Mid-Term Review Report


Post privatization turnaround recommendations

OC3.03.02

BPE Relationship Lead, Peter Graham, and Doug Hinrichs

04/01/19 – 09/01/19

Opportunity to help BPE improve DISCO performance

OC1.03

OC3.04

OC4

a. Assessment of opportunities for BPE to improve DISCO performance

b. TA to BPE board members to increase BPE efficacy

c. Transaction advisory support for reprivatization of legacy NDPHC assets

d. Targeted TA to support application of recommendations

Gas policy impact analysis for fueling domestic power generation

OC3.04.01

MPR Relationship Lead and Gas Analyst

10/03/18 – 01/15/19

Need for transparency in the gas sector

OC1.01

OC3.04

a. Review of existing sector policy, environment, national, and corporate plans completed to date

b. Barriers to bankable GSAs report

Inter-Agency Advisory Group to support policy coordination between MPR and MoPWH

OC3.04.02

MPR Relationship Lead and Colin McCollester

Ongoing Currently unclear or contradictory policy deters investment and makes development of the sector difficult

OC1.05

OC3.01

a. Monthly stakeholder meetings and meeting notes

b. Action plan for priority initiatives

Gas pricing policy review (gas diagnostic extension)

OC3.04.03

Gas Lead and Colin McCollester

11/05/18 – 02/05/19

Work would continue Deloitte’s current State Department work

Prior to providing support, there is a need to further critically assess the opportunity for impact with specific view on the Draft Gas Policy and PIB

a. Gas pricing cost decomposition

b. Gas pricing framework policy options

c. Stakeholder alignment sessions

TCN project funding review

OC3.05.01

TCN Relationship Lead, Colin McCollester, and Robert Kramer

09/10/18 – 12/10/18

To ensure that TCN has sufficient resources to meet obligations

OC1.06 a. Review current and recent budget funding for TREP initiatives; discuss with donors involved (WB, AfDB, JICA, AFD, and IsDB) allocations and assess impacts on system development priorities; identify future funding gaps for Fichtner transmission master plan and 20-year transmission plan

b. Assess barriers to accessing donor long-term finance in the near term for TCN

c. Explore additional long-term FGN funding sources (CBN, NDPHC)


Analysis of system and market operations

OC3.05.02

TCN Relationship Lead and Colin McCollester

10/15/18 – 02/01/19

Inefficient dispatch and operations identified as an issue this will clarify

OC4 OC1

a. Current system operational assessment including areas for improvement

Transmission project funding strategy

OC3.05.03


03/15/19 – 07/30/19

Given past budget shortfalls, TCN needs a bankable funding strategy in order to become viable

OC1.06 a. Develop funding strategy that gives TCN leadership options for reaching full investment funding

b. Identify project information, tariff, and regulation guidelines that will be necessary for determining payback models for project financed assets

c. Priority project support plan

Review transmission planning procedures system to understand load flow and recommend ways to streamline and enhance long-term planning

OC3.05.04


11/01/18 – 03/15/18

To provide TA and support where needed

OC1.06 a. Transmission planning process assessment and recommendations

Procurement program design and internal governance setup

OC3.05.05


06/30/19 – 12/15/19

To assess high priority expansion needs for long-term planning

OC1.06 a. Based on recommendations of earlier assessments, develop project management structure and governance process

b. Deploy embedded adviser to support project management and procurement within TCN

c. Develop initial project pipeline and prospectuses (and supporting docs)

Strategic communications support

OC3.05.06


Ongoing Need for coordination within the power sector

OC4 a. Strategic communications support to assist TCN to effectively communicate and coordinate with other MDAs, DISCOs, and GENCOs

Transmission tariff sensitivity analysis

OC3.05.07


10/22/18 – 03/25/19

Need for coordination within the power sector

OC3.02

OC4

a. Rate impact analysis showing tariff impact as the projects are implemented and enter service

b. Workshop presenting model to NERC, TCN, and DISCOs in a workshop

Power sector

MoPWH Relationship Lead and Colin

05/01/19 – 09/30/19

To assess options to implement much

All a. Review of current MDA power sector planning efforts, gaps, overlaps, and opportunities


planning assessment

OC3.06.01

McCollester

needed power sector planning

b. Long-term power sector planning strategy and options

c. Stakeholder workshop on the benefits of power sector planning and potential mechanisms for Nigeria

Development partner coordination support

OC3.06.02

MoPWH Relationship Lead and Colin McCollester

10/15/18 –02/01/19

In line with power sector planning, MoPWH has asked for assistance in coordinating development partner support

a. Development partner assistance mapping for the electricity sector

b. Design coordination unit, and agree approach

MDA payment coordination and optimization

OC3.06.03


11/01/18 –03/01/19

MDAs are often the biggest source of losses for DISCOs making them a major priority

a. Assess current cost of MDA nonpayment to DISCOs

b. Identify leading practice to enhance MDA utility payment

c. Develop long-term strategy for MDA utility payment

Strategic coordination support

OC3.06.04


Ongoing Current power sector in need of strong coordination and long-term planning

All a. Sector coordination support to help MoPWH to effectively communicate and coordinate public and private actors in the sector

OUTCOME 4: PROMOTE IMPROVED LIQUIDITY THROUGHOUT THE ENERGY SECTOR

Appraise DISCO interventions under PATRP and high-level assessment of DISCOs not supported by PATRP for selection of DISCOs to receive technical assistance through NPSP

OC4.01.01

Peter Graham

Kashan Saeed EMRC

09/15/18 – 12/31/18

Determination of eligible DISCOs for focused technical assistance

OC3 a. DISCO assessment report


Develop and implement PIP for continued assistance to DISCOs under PATRP

OC4.02.01

Peter Graham

Kashan Saeed

09/01/18 – 03/31/19

Continue performance improvement support for DISCOs undertaken by PATRP

OC4.02 (c)

a. PIPs for DISCOs under PATRP

b. Quarterly implementation progress report

In depth diagnostics and develop PIP for newly selected DISCOs

OC4.02.02

Peter Graham Kashan Saeed

EMRC

02/01/19 – 07/31/19

Targeted technical assistance for newly selected DISCOs

OC4.02 (c)

c. Diagnostics report for each newly selected DISCO

d. PIP for each newly selected DISCO

Develop MOU with selected DISCOs

OC4.02.03

Peter Graham

Kashan Saeed

04/01/19 – 08/15/19

Documented agreement with DISCOs

OC4.02 (a)

OC4.02 (b)

a. MOU for selected DISCOs

Setup of PMU to initiate, support, and monitor implementation6

OC4.02.04

Peter Graham Kashan Saeed

EMRC

03/01/19 – 09/30/19

Implementation support for developed performance improvement programs

OC4.02 (a)

OC4.02 (b)

a. Quarterly PMU implementation progress report for each DISCO

Develop an agreement with ANED (and possibly other training institutions) and support development of DISCOs PIPs

OC4.03.01

Peter Graham

EMRC

10/01/18 – 03/31/19

Support DISCOs to meet NERC’s PIP development requirements

OC4.01 (b)

OC4.02 (c)

a. Cooperation agreement on DISCO-wide training

b. Initial trainings on PIP development

c. M&E protocol for assessing the effectiveness of web-based training

Conduct a training needs assessment and develop a pilot capacity building program targeted to all the DISCOs

OC 4.03.02

Peter Graham EMRC

TBD

11/01/18 – 03/31/19

Build the capacity and capability across all DISCOs

OC4.02 (a)

OC4.02 (c)

a. Training needs assessment and Web-based training concept note

Build ANED’s capacity to influence policy,

Peter Graham EMRC

TBD

12/01/18 – 09/28/19

Build ANED’s credibility and effective

OC4.02 (a)

OC4.01 (b)

a. ANED “voice of the DISCO industry” strategy


attract donor grants, etc.

OC 4.03.03

Build the regulatory regulations functions of DISCOs

OC4.04.01

Peter Graham

10/31/18 – 03/31/19

Identify gaps to address regulatory issues

OC4.04 (a)

a. Regulatory relations capacity building program

Coordinate with Outcome 3 team and the embedded NARUC adviser to help develop new regulatory frameworks for DISCOs

OC4.04.02

Grayson Heffner

Kashan Saeed

01/30/19 – 03/31/19

Establish best international regulatory frameworks in Nigeria

OC 4.04 (b)

a. Recommended regulatory frameworks for encouraging DISCO performance improvements

Support standards and standardization for the meter asset provider industry

OC4.05.01

Peter Graham

09/15/18 – 09/30/19

(ongoing)

NERC support for MAP

OC4.05 (b)

a. MAP Industry technical assistance plan

Develop and implement distribution transformer-metering pilot projects at selected DISCOs, and support development of improvements in estimated-billing by enabling systems with metered data at the secondary transformer level OC4.05.02

Peter Graham

09/15/18 – 09/30/19

(ongoing)

NERC and DISCO support

OC4.05 (a)

a. Secondary metering pilot projects

b. Improvements in methods for estimating bills based on localized transformer metered data

CROSSCUTTING ACTIVITIES

Develop development partner map to guide partnership and alliance strategies

Rachel Paulk

04/16/18 –09/30/19

(Recurring)

Best practice

a. Partnerships map


PMO5.01.01

Support development partner coordination group

PMO5.01.02

Mary Worzala

Rachel Paulk

TBD – depending on development partner interest

Best practice

a. Development partner working group agendas and notes

Conduct technical working groups

PMO5.01.03

Outcome Leads

09/01/18 –09/30/19

(Recurring)

Best practice

a. Event or meeting with products outlined in events SOP

Help Power Africa facilitate implementing partners’ meeting

PMO5.01.04

Rachel Paulk

04/16/18 –09/30/19

(Recurring)

Best practice

a. Quarterly event or meeting with products outlined in events SOP

Participate in Power Africa forums and events

PMO5.01.05

Depending on event

As requested

Best practice

a. Presentations and other preparation materials

Branding and marking plan (BMP)

PMO5.02.01

Rachel Paulk; Communications Lead

04/16/18 – 05/02/18

Contract requirement

a. Finalized and approved BMP

Communications strategy

PMO5.02.02


04/16/18 –12/21/18

Best practice

a. Communications strategy

Define and design strategic campaigns

PMO5.02.03


04/16/28 – Ongoing

Best practice

a. Strategic campaign plan

Events SOP guide

PMO5.02.04

Communications Lead; Events Coordinator

04/16/18 – 10/30/18

Best practice

a. Events SOP and checklist

Communications products; including success stories, press releases, regulating updating of project social media

PMO5.02.05

Communications Lead

Ongoing Best practice

a. Create and publish communications products as needed


Draft and submit initial ME&L plan

PMO5.03.01

Rachel Paulk; Britney Weber

04/16/18 – 03/01/19


a. Finalized and approved ME&L plan

Baseline activities and target setting for M&E indicators, where required

PMO5.03.02

Rachel Paulk; Britney Weber; NPSP Relevant Technical Leads

04/16/18 –03/01/19


a. Baseline methodology and research in report format to integrate into M&E The least-cost approach using open source data will be used where applicable. For EE and institutional capacity, surveys and baselining tools will be developed and scopes of work for these will be shared with COR.

Finalize the M&E database and reporting tool

PMO5.03.03

Rachel Paulk; Britney Weber

ME&L Specialist

04/16/18 –03/01/19


a. Internet-accessible M&E reporting and analysis tool

b. Tableau dashboards

Submit quarterly progress reports including an M&E data update

PMO5.03.04

Britney Weber

ME&L Specialist

04/16/18 – 09/30/19

(recurring)


a. Quarterly progress reports M&E status

Conduct a gender gap analysis of the Nigerian energy sector

PMO5.04.01

NA – completed by USAID

04/16/18 – 04/16/18

Contractual requirement

a. Gender gap analysis (conducted by USAID prior to awarding Deloitte the NPSP project)

NPSP Gender and Social Inclusion Plan

PMO5.04.02

Jenine Jaradat (Gender Adviser) Gender Specialist

04/16/18 –11/29/18


a. Finalized and approved Gender and Social Inclusion Plan

Draft and submit Environmental Mitigation and Monitoring Plan (EMMP)

PMO5.05.01

Environmental Adviser

04/16/18 –03/01/19


a. EMMP

Quarterly review of environmental compliance

PMO5.05.02


04/16/18 – Quarterly

(recurring)


a. EMMP quarterly update

TA on project development documents as required by transactions

PMO5.05.03


As required

Best practice

a. EIAs and other project deal documents as required


Mobilization and Procurement Plan

PMO5.06.01

Mary Worzala, Rachel Paulk

04/02/18 – 05/02/18


a. Finalized and approved Mobilization and Procurement Plan

Branding and marking plan (BMP)

PMO5.06.02

Rachel Paulk

04/16/18 – 05/02/18


a. Finalized and approved BMP

Biweekly updates including planned activities, events, and travel

PMO5.06.03

Mary Worzala, Rachel Paulk

Ongoing Best Practice

a. Biweekly NPSP report

Annual workplan Year 1

PMO5.06.04

Mary Worzala; Rachel Paulk

04/16/18 –10/26/18


a. Integrated annual workplan (submitted to TOCOR within 30 days of every subsequent year of period of performance)

Annual workplan Year 2

PMO5.06.05

Mary Worzala; Rachel Paulk

07/01/19 – 08/30/19


a. Finalized and approved ME&L Plan (submitted within 90 days of contract award date)

Submissions of datasets/documents to the Development Experience Clearinghouse (DEC)

PMO5.06.06


04/16/18 – 09/30/19

(Recurring)


a. Ongoing submissions of datasets/documents to the development library

Quarterly Progress Reports; includes Success Stories and project summary documents

PMO5.06.07


04/16/18 – 09/30/19

(Recurring)


a. Quarterly progress reports (within 15 days after the end of each quarter of performance); success stories; project summary documents

Complete quarterly update of Power Africa transaction tracker (PATT)

PMO5.06.08

Technical Leads

04/16/18 – 09/30/19

(Recurring)


a. Quarterly PATT data entry (within 15 days after the end of each quarter of performance)

Program administration and operations (all workstreams)

Nadine Dure; Mariela Tsvetkovska

04/16/18 – Ongoing

Required a. Program operations and management support


ADM6.01.01

Documents

NIGERIA POWER SECTOR PROGRAM QUARTERLY PROGRESS …