Overview of Niger Delta Power Holding Company Limited

Overview of Niger Delta Power Holding Company Limited Presentation to: THE NIGERIA ENERGY FORUM Presented by: Mr. Chiedu Ugbo Managing Director/CEO 3 rd December 2020

CORPORSATE STRUCTURE AND CORPORATE GOVERNANCE • Niger Delta Power Holding Company Limited (NDPHC) was incorporated in 2005 under CAMA as the legal vehicle to implement National Integrated Power Project (NIPP) using private sectororientated best business practices. • NIPP was designed as a fast-track government initiative to add significant new electricity generation capacity with associated transmission, distribution and gas infrastructure to Nigeria Electricity Supply Industry and stabilize the electricity supply in the country. • NDPHC was funded from the Excess Crude Account (Federation Account) 1

Shareholding Structure • Shareholding structure was in accordance with the revenue allocation formula for the three tiers of government • Shareholding. - Federal Government: - States: - Local Government: 47% 35% 18% • No more annual budgetary appropriation approved by the National Assembly. 2

Board Composition of NDPHC • Day-to-Day management of the company is supervised by the board in line with CAMA. • Board Meets regularly almost on montly basis – Last meeting was on Nov 30, 2020. • NDPHC has 17 directors as follows: • The Chairman & four other persons representing the Federal Government of Nigeria • Six representatives of State Governments (drawn from the 6 geopolitical zones of Nigeria) • The Managing Director/CEO and five Executive Directors Federal Government • His Excellency, The Vice President of the Federal Republic of Nigeria (Chairman of the Board) • Honourable Attorney-General of the Federation and Minister of Justice • Honourable Minister of Finance • Honourable Minister of Power. • Honourable Minister of Petroleum (State) 3

Board Composition of NDPHC States • • • Executive Governor, Adamawa State Executive Governor, Anambra State Executive Governor, Edo State Executive Governor, Kebbi State Executive Governor, Lagos State Executive Governor, Plateau State 4

Representatives of State Members of the Board North East North West Adamawa. l Bauchi. l Borno l Gombe l Taraba l Yobe l Jigawa Sokoto l Kaduna Katsina l Kano l Katisina l Kebbi l o ot k So fa Z bi K am no Ka g Ni T wa ra sa s Na Ekiti G e at Pl a ue n Be T Benue l Kogi l Kwara l Nasarawa l Niger l Plateau l o Enugu Ebo nyi Anambra am d A au ab ar i g Ko Ed Cross ia River b o Im A lta De ers a ls ye Riv Ba Akwa Ibom l Bayelsa l Cross River l Delta l Edo l Rivers om u Ba FC Ondo Lagos North Central be a aw Kw Osun o rn Bo er a ar Oyo be Yo i ch Ka Ogun l a aw Jig na du l South s at b Ke South West Ekiti Osun l Lagos Oyo l Ogun l Ondo a in ra wa Ak om Ib South East Abia l Anambra l Ebonyi l Enugu l Imo l 5

NDPHC Adheres to Code of Government • NDPHC procurement also governed by the Public Procurement Act, 2007. • “NO Objection” is obtained for BPP prior to Contract award. • FGN holds more than 35% of NDPHC’s Shares. 6

Generation 7

Generation 8

Generation Projects - Overview • • All figures for capacity are stated at ISO. Total NDPHC Installed capacity for Ten Power Plant is 4, 047. 30 MW. Presently, NDPHC has 4, 047. 3 MW installed from eight operational power plants due to recalcitrant contractors. Gbarain: 1 Unit of 126 MW Completed. The Second Unit (GT-1) is at Commissioning Stages. Omoku & Egbema : Still Under Construction. EPC contract terminated for non-performance. Procurement for New Contractor to 9 Complete the Construction at final stages is awaiting BPP for NO-Objection.

Gas Infrastructure 10

NIPP Gas Projects Gas Infrastructure § 7 gas pipeline and Metering Station projects § Completed Gas infrastructure are supposed to be transferred to NGC but the transaction is yet to be concluded 11

Project Status S/NO 1 Gas Project Gas Pipeline And Metering Station Completion Status Ihovbor 100% Gbarain 2 3 Gas Pipeline And Metering Station 100% Egbema 85% Calabar 100% Uquo-Oron. Creektown. Calanar 100% 4 Gas Pipeline And Metering Station Sapele 100% 5 Gas Pipeline and CSS transformer Alaoji 100% 6 Gas Pipeline And Metering Station Geregu 100% 7 Gas Pipeline And Metering Station Omotosho 100% 12

Transmission 13

Overview of NDPHC’s Transmission Projects Transmission § 121 Transmission projects. § 50 Nos. 330 k. V and 25 Nos. 132 k. V substations. § Expansion of 36 existing substations. § 6, 150 MVA of 330/132 k. V and 2, 800 MVA of 132/33 k. V transformer capacity. § 2, 686 km of 330 k. V lines and 745 km of 132 k. V lines. § Legal Asset transfer on-going awaiting NERC valuation A total of 83 Nos. Transmission projects comprising of 50 Nos 330/132/33 KV Substations, 20 Nos 330 KV Transmission Lines and 13 Nos 132 KV Transmission Lines have been completed and transferred to TCN. 14

Distribution 15

NIPP Distribution Projects Distribution § About 374 Distribution projects. § 337 33/11 k. V substations with a capacity of 4, 195 MVA. § 25, 281 25 k. VA and 50 k. VA CSP transformers. § 199 Distribution transformers(100, 200, 300, 500 KVA) of 108 MVA § 2, 256 km of 33 k. V lines § 4, 670 km of 11 k. V lines. § Projects transferred to respective Dis. Cos on completion. § Legal Asset transfer on-going awaiting NERC valuation 16

Deployment of 20, 000 Solar Home Systems 17

Data Metrics 20, 000 SHS Deployed • Installations Completed • 12 States Impacted Over 500 Jobs Created • Direct Hire 275 • Indirect Hire Over 250 Over 100, 000 people impacted • 20, 000 households • Average 5 people /Household 18

Generation and Operations Challenges: 1. • Transmission constraints. NDPHC has installed capacity of about 4000 MW which are mostly available, except for maintenance Outage but is dispatched at about 700 MW on average by the System Operator(SO) for reasons ascribed to load rejection by Discos. • 2. Inadequate dispatch grossly affects NDPHCs revenue generation capacity Irregular Dispatch (Disco Load Rejection) Irregular Dispatch and the SOs frequent start-up & shut down instructions of the units for reasons also ascribed load rejection issues causing increased maintenance cost of the units 3. • Gas constraints Three Power plants on the eastern axis of the Niger Delta have full gas but constrained by dispatch challenges. • Five Power plants on the Western axis of the Niger Delta have major insufficient gas supply. As at today, gas requirement is 560 mmscf/day while 60 mmscf/day is available. Negotiating additional 50 mmscf/day with Seplat 19

Liquidity Challenge: • Low revenue generation due to poor dispatch • Low remittance from the market (NBET) Last collection as at August 2020 is 21. 5% of invoiced energy. Effects • High maintenance cost due to frequent shut down and start instructions up by the System operator (TCN) • Shortage of spares due to paucity of funds to stock spares • Inability to execute gas contract with Take or Pay (To. P)/security 20

Regulatory Issues: • Low tariff compared with othermal stations. NDPHC’s tariff is fixed at N 18. 4 per KWh as against N 24 per KWh for other IPPs. • No Capacity payment because no PPA from NBET. • Payment for ancillary services is yet to be determined and commenced. • Uncertainty in exchange rate. Gas was paid for at N 380/USD$ whereas the market rate was at N 460/USD$. Difference has been a cause for dispute with indigenous gas suppliers. 21

OVER COMING THE CHALLENGES Issues described presents new challenges as well as immediate opportunities for growth. Ø At NDPHC, we recognize the strong potentials for growth with increasing need for added investments in the power sector to spurn and sustain this potential Ø Having played a pivotal role in the current increase in installed capacity of close to 13 GW in the last ten years NDPHC will continue as part of its medium-to long-term vision, to play a role in end-to-end infrastructure development in the sector - Taking Advantage of Eligible customers declaration (as declared by the HMOP) and bilateral (With the strong support of the Board) Ø The next set of projects will further improve capacity in generation, Transmission (in collaboration with the state-owned Transmission Company of Nigeria) and distribution, in continuation of the role of NDPHC as an infrastructural provider in the Nigerian Power Sector. 22

THANK YOU 23