Document background
The Power Offtake Agreement serves as a critical commercial instrument in Nigeria's power sector, establishing the legal and commercial framework for power purchase arrangements between generators and offtakers. This document is essential for any power generation project in Nigeria, whether conventional or renewable, and must comply with the Electric Power Sector Reform Act and NERC regulations. It is typically used when developing new power generation facilities or restructuring existing power supply arrangements, providing certainty for project financing and long-term operational stability. The agreement addresses key aspects such as power purchase commitments, pricing mechanisms, technical standards, and risk allocation, while incorporating specific requirements of Nigerian law and market conditions. It forms the backbone of project financing arrangements and often requires approval from regulatory authorities.
