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A Concession Agreement lets private companies operate public assets or provide services that typically belong to the government. In Nigeria, these contracts are common for infrastructure projects like toll roads, ports, and power plants, where the government grants a company the right to build and run facilities for a set period.

Under Nigerian law, particularly the Infrastructure Concession Regulatory Commission Act, these agreements spell out how long the company can operate the asset, what fees they can charge, and their maintenance duties. After the concession period ends (usually 20-30 years), the asset returns to government control, making it a practical way to develop public infrastructure without spending state funds upfront.

Use a Concession Agreement when your private company plans to develop and operate major public infrastructure in Nigeria. These agreements work especially well for large-scale projects like airports, railways, or power stations where significant private investment can benefit public services while generating returns through user fees or revenue sharing.

The timing is right for a Concession Agreement when you need to establish clear terms for a long-term public-private partnership, typically 20+ years. It's essential before breaking ground on infrastructure projects regulated by the ICRC Act, particularly when multiple stakeholders are involved or when the project requires substantial capital investment with gradual cost recovery.

• Build-Operate-Transfer (BOT): Most common type for new infrastructure, where private firms construct and operate facilities before transferring them back to the government
• Rehabilitate-Operate-Transfer (ROT): Used for existing but underperforming assets that need renovation and better management
• Build-Own-Operate (BOO): Allows private ownership without transfer requirement, common in power generation projects
• Operations and Management: Focuses purely on running existing facilities, popular for ports and transport hubs
• Joint Development: Combines government and private resources, often used for mixed-use developments and special economic zones

• Government Entities: Federal or state ministries grant concession rights and oversee compliance through agencies like the Infrastructure Concession Regulatory Commission (ICRC)
• Private Companies: Usually large corporations or consortiums that invest in, build, and operate the concession projects
• Legal Teams: Specialist lawyers draft and negotiate Concession Agreement terms, ensuring protection for all parties
• Financial Institutions: Banks and investors who provide project funding and require specific terms in the agreement
• Technical Consultants: Engineers and industry experts who advise on operational requirements and performance standards

• Project Scope: Define the infrastructure asset, development timeline, and operational requirements clearly
• Financial Model: Calculate investment costs, revenue projections, and payment mechanisms including user fees or government subsidies
• Technical Specifications: Gather detailed engineering plans, performance standards, and maintenance schedules
• Regulatory Compliance: Obtain necessary ICRC approvals and environmental permits before drafting begins
• Risk Assessment: Map out potential challenges, force majeure events, and mitigation strategies
• Stakeholder Input: Collect requirements from all parties, including government agencies, investors, and technical experts

• Parties and Purpose: Clear identification of government grantor, concessionaire, and project objectives
• Grant of Rights: Detailed scope of concession, duration, and exclusive/non-exclusive nature
• Financial Terms: Revenue sharing, tariff structure, payment mechanisms, and performance bonds
• Operating Standards: Performance metrics, maintenance requirements, and quality benchmarks
• Risk Allocation: Force majeure provisions, liability limits, and compensation events
• Termination Clauses: Early termination rights, handover procedures, and asset transfer terms
• Dispute Resolution: Arbitration procedures under Nigerian law and jurisdiction specifications

A Concession Agreement differs significantly from a Business Acquisition Agreement in how public infrastructure projects are handled in Nigeria. While both involve transferring operational control, they serve distinct purposes and follow different legal frameworks.

• Ownership Structure: Concession Agreements maintain government ownership while granting temporary operational rights; Business Acquisition Agreements transfer full ownership permanently
• Regulatory Framework: Concessions fall under ICRC Act oversight and public infrastructure laws; acquisitions follow private commercial law and CAMA regulations
• Duration and Terms: Concessions typically last 20-30 years with mandatory public service obligations; acquisitions are permanent with fewer public interest requirements
• Asset Return: Concessions require asset reversion to government control after the term; acquisitions have no return obligation
• Public Interest: Concessions must maintain specific service levels and public access; acquisitions allow more operational flexibility