In Nigeria, the introduction of bilateral electricity purchase agreements is deemed essential to facilitate the direct sale of power generated by Generation Companies (GenCos) to Distribution Companies (DisCos)…CONTINUE READING....KINDLY READ THE FULL STORY HERE▶
The implementation of these agreements between GenCos and DisCos is expected to address the financial challenges faced by DisCos and present a significant obstacle in the execution of bilateral power contracts.
The bilateral power contract framework will enable DisCos to engage directly with cooperative GenCos for energy supply under terms mutually agreed upon.
This is anticipated to enhance the effectiveness of the Power Purchase Agreement (PPA), thereby increasing power generation and improving electricity distribution across the country.
Within the electricity sector, stakeholders are currently in negotiations to establish bilateral contracts, paving the way for power purchase agreements in the contract market phase, which is set to commence in July.
Three DisCos, namely Eko Electricity Distribution Company, Ikeja Electric, and Abuja Electricity Distribution Company, received instructions from the Nigerian Electricity Regulatory Commission (NERC), the regulatory authority, earlier this year regarding the implementation of bilateral contracts with GenCos.
The existing contracts within Nigeria’s energy supply industry involve the Nigerian Bulk Electricity Trading Plc (NBET), responsible for managing and administering the electricity pool, purchasing energy and capacity from 26 generation plants owned by GenCos with contracts in place with NBET.
