6 December 2017
Templars has advised American oil giant, ExxonMobil and the national oil company, Nigerian National Petroleum Corporation (NNPC), on the sale of the 540MW integrated Qua Iboe Power Project (“QIPP”) to a joint venture company of Black Rhino Group (the Africa-focused power and infrastructure portfolio company of leading private equity firm, Blackstone), the Dangote Group (one of the largest industrial conglomerates in Africa) and NNPC Power (the newly created power sector subsidiary of NNPC).
The QIPP comprises a gas-fired power plant under development and a proposed 58-kilometre transmission line that will connect the plant to the national grid. The project company has concluded a power purchase agreement with the government-backed bulk electricity purchaser, Nigeria Bulk Electricity Trader plc, and a put/call option agreement with the Nigerian government. The company has also entered into a 20-year gas sale agreement with Exxon Mobil for the supply of approximately 400 million standard cubic feet per day of gas through an undersea gas line connected to Exxon Mobil’s offshore oil production facility. The project also benefits from a $150 million World Bank partial risk guarantee. The plant is expected to commence commercial operations in H2 2021.
The Templars team on the sale of the project was led by partners Chike Obianwu and Desmond Ogba who were assisted by senior associate Moses Pila and associates Ann Ofili, Sesan Sulaiman, Inna Ali and Anita Omonuwa.
Speaking at the signing of the asset purchase agreement, Chike Obianwu said: “We are very pleased to have worked with ExxonMobil and NNPC on this most important transaction – undoubtedly the first transaction of its kind in the Nigerian power sector. Of course, there have been two or so other important sales or acquisitions of power projects that are still under development, and we at Templars have advised on such other transactions. But the uniqueness of the QIPP transaction is that it comes almost complete with all the major ingredients required to take the project to completion including the generation licence, EIA approval, an initialled and now executed PPA, the PCOA with the Nigerian government, a GSA with a credible gas supplier and an already approved World Bank PRG.”
In addition to its role in the QIPP transaction, Templars has also recently advised Africa Infrastructure Investment Managers on their acquisition of a controlling stake in the 150 MW open-cycle gas-fired Proton Delta Sunrise Power Project to be located in Sapele in the Delta region, and separately Azura Power on their acquisition of the 125 MW Nova Solar 5 photovoltaic Solar Power Project to be located in Katsina in the North East.
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