Document background
The Bilateral Power Purchase Agreement (PPA) is a fundamental document in Nigeria's power sector, used to establish long-term electricity supply arrangements between power generators and buyers. This agreement type became particularly important following Nigeria's power sector privatization under the Electric Power Sector Reform Act 2005, which created a market for private power generation and distribution. The document typically spans 20-25 years and includes detailed provisions for power pricing, delivery obligations, technical requirements, and risk allocation. It is essential for project financing in Nigeria's power sector and must comply with NERC regulations while addressing specific challenges in the Nigerian electricity market, such as grid stability, currency considerations, and local content requirements. The agreement is crucial for both conventional and renewable energy projects and often serves as security for project finance lenders.
