Company Profile - North South Power
Transcript of Company Profile - North South Power
1... The Future of Power Generation
Company Profile
... The Future of Power Generation
2... The Future of Power Generation
1
2
3
Overview of NSP’s Operating Environment
NSP: An Emerging Power Sector Giant
Asset Profile
03
07
13
Outline
4 Management Strategy and Outlook 20
For discussion purposes only | Private and Confidential
... The Future of Power Generation
... The Future of Power Generation 3
Overview of NSP’s Operating Environment
Section One
4... The Future of Power Generation
66%
13%
20%1%
Natural Gas
Oil
Hydro Power
Non-Hydro Power (Renewables)
Nigeria has one of the largest natural gas reserves in the world. Natural gas serves as
the main fuel source of electricity in Nigeria. Despite the abundance of natural gas,
power output gap (based on potential power requirements) in Nigeria has remained
substantial over the years.
The sector depicts signs of expansion as real GDP growth will continue to accelerate
in Nigeria over the coming quarters, benefitting from an uptick in crude oil production
and rising government spending - afforded by higher commodity prices.
The electricity, gas, steam and air conditioning sector contributed 0.39% to real GDP
in 2017, compared to 0.34% in 2016
The sector contracted by 16.43% in 2017 mainly as a result of increased generation
and successful peace talks in the Niger Delta
Nigeria in 2017 had a total power generation of 27.6TWH, net consumption of
24.9TWH and net capacity of 13,710MW. Thermal power – mainly oil and gas –
constituted the majority of power generation, at 80%; hydropower made up a further
19.9%, with limited contributions by non-hydropower renewable sources.
5363130159187201215298
858
1,183
LibyaKuwaitIraqAlgeriaNigeriaVenezuelaUAESaudi
Arabia
QatarIran
Nigeria’s gas profile, amongst select OPEC member states
200 – 500mw
>500mw
Installed capacity
Gas Thermal plants
Hydro-electric plants
Plant Type
Oyo
Ekiti
Ondo
Cross
River
Anambra
FCT
Benue
Taraba
Niger
Kwara
Kebbi
Zamfara
Sokoto
Katsina
Jigawa
Kano
Kaduna
Plateau
Bauchi
Gombe
Yobe
Borno
Adamawa
Ogun
Edo
Delta
Enugu
Akwa
Ibom
Ebonyi
Imo
Enugu
Lagos
Rivers
Abia
Nasarawa
Shiroro
Kogi
Nigeria’s Power Sector Profi le
Overview Power Generating Companies in Nigeria
Power Generation MixGas Reserves (TCF)
5... The Future of Power Generation
Industry Model
End Users
Source of Fuel
Hydro Energy
Natural Gas(NGC & GACN)
Others
PHCN Successor (6)
GenCos
IPPs
NIPP Power Stations (10)
(System Operator)
Transmission Company of
Nigeria
(Market Operator)
PHCN Successor DisCos (11)
Embedded Generation
Captive Power
Generation
Primary Energy
Cashflow
Electricity Flow
Nigeria Bulk Electricity Trading Company
DistributionTransmissionGeneration
▪ Embedded GenCos: The sector structure permitsgeneration companies to supply directly todistribution companies with the tariffs approvedby NERC
▪ Captive Power: End users procure power directlyfrom (third party) suppliers on site (usuallyrelatively small given the need to have all outpututilised on site). No TCN or DisCo networks utilised.Private to private sales (terms to be commerciallyagreed)
Note:1 Gas prices are regulated2 End users provide the cashflow which is distributed through the entire value chain
Nigerian Electricity
Regulatory
Commission (NERC)
Responsible for undertaking
technical and economic
regulation of the Nigerian
Electricity Supply Industry
Nigerian Bulk
Electricity Trading Plc
(NBET)
Engages in the purchase of
electrical power and ancillary
services (from independent
power producers and the
successor generation
companies) and subsequent
resale to distribution
companies and eligible
consumers
Operator of the
Nigerian Electricity
Market
Responsible for the operation
of the electricity market and
settlement arrangements
Nigeria System
Operator
Responsible for the planning,
dispatch and operation of the
transmission system
Gas Aggregation
Company Nigeria
Limited
Responsible for stimulating
growth of natural gas
utilization in the Nigerian
domestic market and is the
vehicle for the implementation
of the Nigerian Gas Master
Plan (NGMP) commercial
framework
Industry Structure
PHCN: Power Holding Company of Nigeria GenCos: Generation Companies IPPs: Independent Power Producers
DisCos: Distribution Companies
Key Regulators
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Huge Supply Demand Gap: Sufficient Room for Growth
Nigeria Power Output Gap Analysis
12,522
3,879 3,592
1,864
3,262
287 1,746 447
1,065
5,381
5,338
216
4,055
7,200
Installed
Capacity
Non-Available
Capacity
Non-Operational
Capacity
Available
Capacity
Transmission
Losses
Transmitted Distribution
Losses
Distributed
-75%
c.7.4% transmission
loss
c.12.5% technical
loss
Estimated additional capacity
Generation Transmission Distribution
Commentary
► Only ~25% of Nigeria’s 12,522MW installed capacity reaches the
end user. Widespread inefficiency means that only 3,879MW of this capacity is operational with ~3,600MW transmitted and ~3,100MW distributed
Source: Nigeria baseline report
For discussion purposes only | Private and Confidential
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... The Future of Power Generation 7
NSP: An Emerging Power Sector Giant
Section Two
8... The Future of Power Generation
Mission:
“To be a foremost power generating company”
A Pan African Generation Company with a Growing Portfolio
About North South Power
North South Power Company Limited was established in 2012 to own and operate a diverse and growing portfolio of electricity generation businesses across
Africa
To be the leading power generation company in Sub-
Saharan Africa focused on safely providing reliable and sustainable
power
NSP is currently advancing plans to commence construction of its
300MW solar farm which will enable the Company continue to
provide an average of 8% of Nigeria’s power, whilst aiming to meet its target to provide 10% of
Nigeria’s power
Overview Strategic Intent Outlook
Mission, Vision and Core Values
Vision:
“To consistently generate reliable power in line with
international best practices, driven by innovation and
excellence”
Excellence in Service Delivery
Teamwork
Manage our power plants for use in
perpetuity
Power Interests
Hydro Solar Wind Biomass
Key Highlights
Provides Power to >10 million people
Generates ~8% of Nigeria’s power
~20% up from 2015 generation output
47% - 3yearRevenue CAGR
A-
Recent Rating (2018)
A-Highest rating for any company in the Power Sector
Dignity of Individual
9... The Future of Power Generation
Sound Operating Track Record with Milestone Achievement
In Recent Years…
Commentary
► Over the years, the Company has grown to become one of the most efficient power generating companies in Nigeria, contributing over 8% to the country’s power output
History and Key Milestones
NSP was incorporated as a
limited liability company to own
and operate a diverse and
growing portfolio of electricity
generation
North South Power Company
Limited entered and won a
competitive bid process for a 30
year concession of Shiroro
Hydroelectric Plc
Launched expansion/ business
diversification drive into
Renewable Energy space
Incorporated Shiroro Solar
Generating Company Limited to
execute solar power generation
project
Activation of NSP’s PPA with NBET
Achieved key terms of
Performance Agreement with
BPE, 30 months before target
date
NSP won the 25 year concession
of the 30MW Gurara
hydroelectric power plant
located in kaduna state taking its
total asset generating capacity
to 630MW
NSP is currently responsible for
8% of Nigeria’s Power Generation
and has a target to generate
over 10% of Nigeria’s power by
2020
2012 2013 2015 2016 2017 2020
10... The Future of Power Generation
The Company has boosted output generation to the highest
level since commissioning of Shiroro…
Key Achievements
Ac
ce
lera
ted
De
liv
ery
Op
era
tio
na
l Ex
ce
lle
nc
e
1 ▪ North South Power in 2013 executed a Performance Agreement with the Bureau of Public Enterprises which required recovering capacity of the Shiroro
Hydroelectric power plant to its name plate capacity.
Unit 1
Unit 2
Unit 3
Unit 4
November 2013 April 2016
Name Plate Available Cap. Issue Name Plate Available Cap. CAPEX Spend
150 MW
150 MW
150 MW
150 MW
0 MW
150 MW
150 MW
150 MW
Overdue for overhaul
& Generator winding1
Overhauled
Overdue for
overhaul
Damaged underwater
intake gate & overdue
for overhaul
150 MW
150 MW
150 MW
150 MW
150 MW
150 MW
150 MW
150 MW
US$2 mn
N/A
c.US$2.68 mn
c.US$10 mn
2
2.061.86
2.69
2.23
0.0
1.0
2.0
3.0
2014 2015 2016 2017
Mill
ion
s
Output
Coming off a 10% decline in output in 2015, NSP made remarkable progress in generating output as
high as 2,687,790MWH, representing 52% of utilization in 2016 and about 45% increase over power
generation compared to 2015. This generation output also represents the highest annual generation
since the commissioning of Shiroro Hydro Electric Power Plant in 1990
► Excellent Labour Relations and High Employee Morale: No work
stoppages and the Company has been able to pay salaries on
time despite liquidity challenges. The Company in 2017 paid
productivity bonus and increased salary for the first time
► Excellent Safety Record (Zero fatalities): Highly improved work
safety ethics with provision of safety wears. 1 lost time accident
from which the affected employee has fully recovered
► No environmental breaches: Zero impact on host communities
during spillage
► No breach of NERC and Industry rules
Drivers
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Good Corporate Governance Framework in l ine with set Best
Practice…
Board of Directors and Executive Management
Board of Directors Management
Chairman Non-Executive
Mallam Ibrahim Aliyu
(Chairman)
Engr. Emmanuel Katepa
Hajiya Rahmatu Yar’Adua
Engr. Sanni Ndanusa
Mrs. Irene Chigbue
Dr. George Nwangwu
Mr. Isaac Mate
Mr. Oladapo Peters
Mrs Sa’adiya Aminu
Executive
Dr. Olubunmi Peters (Executive
Vice Chairman / Chief
Executive Officer)
Executive Management Team
Dr. Olubunmi Peters (Executive Vice Chairman/CEO)
Engr. Daudu Abdul-Aziz (Executive Operating Officer)
Engr. Roland Lwiindi (Chief Technical & Commercial Officer)
Kolapo Joseph (GM, Corporate Finance & Business Development)
Ikechukwu Ibiam Okoli (GM, Internal Audit & Risk Management)
Norman kapambalala (GM, Account Services)
Ratio Legal Practitioners (Company Secretary)
Board Committees and Representations
Chairman
Non-Executive Directors
Finance and General Purpose Committee
Technical and Operations Committee
Remuneration and Human Resources
Committee
Audit and Risk Management
Committee
Safety Health and Environment
Total
Executive Director
5 6 6 6 6
Commentary
► NSP is headed by a highly experienced Board of Directors and Management Team, providing oversight and steering NSP’s progress
► NSP has ensured diverse, yet complementary
membership across all Board committees to ensure adequate checks and balances
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. . . and supported by a strong and highly experienced
management team
Profile of Management Team
Executive Vice
Chairman/ CEO
DR. OLUBUNMI PETERS
Career and Educational Highlights
o He has served as Managing Director/CEO
of Federal Road Maintenance Agency
(FERMA) with 28 years of Public Service
Experience
o He is a Board Member of Roads Nigeria Plc,
Member of the Board of XDS Credit Bureau
Limited, Board of Trustee Shaw University,
Raleigh, North Carolina, USA
Executive Operating
Officer
ENGR. DAUDA ABDUL-AZIZ
Career and Educational Highlights
o >30 years cognate experience
o He holds a B.Eng in Electrical Engineering
from Ahmadu Bello University and is a
graduate of the Power Systems Engineering
Course conducted by GE Power Systems,
Schenectady, New York, USA
GM, Accounting
Services
NORMAN KAPAMBALALA
Career and Educational Highlights
o Qualified accountant with >18 years work
experience in financial reporting, financial
control and treasury management
o He previously held the positions of Finance
Director, Senior Manager Finance, and
Chief Accountant at ZESCO and was Senior
Reporting Accountant at CEC Plc.
o Holds an MBA degree
Chief Technical & Commercial
Officer
ENGR. ROLAND LWIINDI
Career and Educational Highlights
o Experienced engineer with versatile
experience across business development,
project planning and implementation and
commercial arrangement
o He was responsible for feasibility studies for
hydro power development on the Luapula
River
GM, Internal Audit, Risk
Mgt and Tax
IKECHUKWU OKOLI
Career and Educational Highlights
o >22years of professional working
experience in Auditing, Accounting,
Taxation and Financial Advisory Services
o He is a Fellow of the Institute of Chartered
Accountants of Nigeria and a member of
Chartered Institute of Taxation of Nigeria
GM, Corporate Finance & Business
Dev.
KOLAPO JOSEPH
Career and Educational Highlights
o Versatile and innovative investment banker
with >13 years cognate experience in M&A,
Debt and Equity Capital raising, project
finance and financial advisory with Vetiva
Capital Mgt Ltd and United Capital Plc
o Holds a degree in Finance from University of
Maryland, College Park, U.S.A and MBA
from the University of Chicago, Booth
School of Business
For discussion purposes only | Private and Confidential
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NSP’s Asset Profile
Section Three
14... The Future of Power Generation
Asset Overview
Feasibility Studies carried out in the 1950s and revised in the early 1970s
Construction commenced in the mid 1979
Engineering consultants – Chas T. Main International Inc. (USA)
Contractors for civil structures: TORNO S.P.A. (Italy)
Main Equipment
suppliers Turbines –Andritz
Hydro (Austria) Generators: Koncar
(Croatia) Generator
Transformers: Toshiba (Japan)
Commissioned and commenced operations
Operated by NEPA until 2005 and upon restructuring of the industry operated by Shiroro Hydroelectric Plc, one of the PHCN Successor Companies
North South Power Company Limited awarded 30 year concession of Shiroro Hydroelectric Plc
1950 - 1970 1979 1990 1990 - 2005 2013
Progress Timeline
1. Shiroro Hydro Electric Power Station (Existing)
15... The Future of Power Generation
Asset Overview
Illustration
Overview of the Power Plant Generator – Turbine Shaft Coupler Generator Radiator
Overview of the Generator Generator Cooling Line Spillway Structure
1. Shiroro Hydro Electric Power Station
16... The Future of Power Generation
Asset Overview
1. Shiroro Hydro Electric Power Station (Existing)
Details
Location: ▪ Shiroro Local Government Area, Niger State, Nigeria
Ownership▪ Federal Government of Nigeria (concessioned to NSP under a 30-year
Agreement 2013)
Years Installed: ▪ 1989 – 1999 (commenced operation in 1990)
Installed Capacity ▪ 600MW (4 * 150MW units)
Typical Annual Energy Production ▪ 2,360 Gwh
Reservoir area at maximum storage ▪ 320 sq.km
Typical Head ▪ 97 m
Typical Station Capacity Factor ▪ 44%
% Contribution to Natural Grid ▪ 8%
Commentary
► Typical station capacity factor► 44%
► Connected to 6 lines that can evacuate 600MW each
► 330KV Shiroro – Abuja
► 330KV Shiroro –Gwagwalada
► 330KV Shiroro – Jebba
(2 Lines)
► 330KV Shiroro – Mando (2 Lines)
17... The Future of Power Generation
Asset Overview
2. Gurara Hydroelectric Power Plant (Ongoing)
Details
Location: ▪ Kachia Local Government Area, Kaduna State, Nigeria
Ownership: ▪ NSP
Typical Annual Energy Production ▪ 115GWH
Installed Capacity: ▪ 30MW
Turbine Capacity: ▪ 3 x 12.5MVA alternator (at 80% power factor)
Target Commencement of Operation: ▪ 2019
Evacuation:
▪ Development is ongoing on the 110Km, 132KV transmission line
connecting the hydro power plant to the TCN Kudenda substation in
Kaduna State
Typical Station Capacity Factor: ▪ 44%
Commentary
► Status
► North South Company Limited, was recently awarded the preferred bidder and is currently negotiating the Concession Agreement of the 30MW Gurara Hydroelectric Power Plant located in Kaduna State
► NSP will take over theoperations of the plantby the 4th Quarter of2019
18... The Future of Power Generation
Asset Overview
3. Shiroro Solar Power Project (Ongoing)
Details
Location: ▪ Shiroro Local Government Area, Niger State, Nigeria
Ownership: ▪ NSP
Status:
▪ Completed preliminary technical feasibility
▪ Completed bankable technical feasibility report
▪ Secured approval of transmission connection from Transmission
Company of Nigeria
▪ Secured approval of Environmental and Social Impact assessment
studies from the Federal Ministry of Environment
Average Solar Radiation: ▪ 5.42Kwh/m2/day
Proposed Installed Capacity: ▪ 300MW
Target Delivery Date/ Commencement of
Operation:▪ 2020
Evacuation: ▪ Similar routes to Shiroro Hydro
Commentary
► Status
► Completed preliminary technical feasibility
► Completed bankable technical feasibility report
► Secured approval of transmission connection from Transmission Company of Nigeria
► Secured approval of Environmental and Social Impact assessment studies from the Federal Ministry of Environment
For discussion purposes only | Private and Confidential
... The Future of Power Generation
... The Future of Power Generation 19
Management Strategy and Outlook
Section Five
20... The Future of Power Generation
Strategic Funding Plan
► NSP intends to tap into the capital market to raise
long term funds to finance NSP’s proposed upgrade
and overhaul of its Unit 4 power generator from
150MW to 165MW capacity and refinance NSP’s
existing loan facilities/obligation.
► The process for the capital raise has commenced with
the proposed registration of NGN50 billion medium
term note programme under which the first series of
15yr instrument would be issued
Development of 300MW Solar Power Project
► Issuance of Generation License, project site, preevacuation and EIA certificate have all beenapproved and received
► Synergy between Solar and hydro will add value tothe grid
► Engagement of Tractebel Engineering consultantto carry out bankable feasibility studies
Strategic acquisition of assets
► Pan African aspirations commencing with Nigeria
► Developing capital structure to acquire NIPP
assets and other available opportunities inNigeria
Optimize and de-risk Shiroro Power Plant
► Overhaul of unit commencing with Unit 4 in 2018
► The overhauls will also include increasing therating of each turbine from 150MW to 165MW-180MW and increasing the efficiency so as to useless water
1
3
2
4
NSP’s Corporate Strategy and Outlook
21... The Future of Power Generation
450
600
1,460
30
100
700
3030
2013 2018 2019 2020 2022 2024
NSP’s Power Generating Capacity Trajectory
Commentary
► NSP envisages a promising future in the power sector in Africa and we will continue to make significant investments aimed at achieving its medium to long term strategic objectives
► NSP has a well defined strategy to ramp-up its power generating capacity by over c.200% to 1,490MW over the next six years
Generating Capacity Trajectory (MW)
NSP took over Shiroro with a structural failure on the intake gate of
generating unit 4. Effectively, Shiroro had an operating
capacity of 450MW
NSP embarked on an aggressive execution of Capacity recovery
programme which resulted in complete
overhaul of the 2 units that were partially overhauled before
takeover and fixing of the intake gate of Unit
4
NSP recently won the 25-year
concession of the 30MW Gurara
hydroelectric power plant located in
Kaduna State
Upon delivery of the ongoing Shiroro Solar
Power Plant, NSP’s power generation
capacity would rise to 730MW
NSP is keen on acquiring aPower Plant of about
700MW .Also a unit will be retrofitted
to increase its capacity from 150MW to 180MW
TODAY
A unit will be retrofitted bringing
NSP’s total estimated power
generation to 1,490 MW by 2024
22... The Future of Power Generation
Contact Details
Kolapo Joseph
General Manager, Corporate Finance and Corporate Development
+ 234 812 702 1000
Engr. Olubunmi Peters
Executive Vice Chairman/Chief Executive Officer
+ 234 803 302 2804
North South Power Company Limited
The Clan PlacePlot 1386A, Tigris CrescentMaitama, FCT Abuja Nigeria
www.northsouthpower.com