Document background
The Power Sales Agreement serves as the primary commercial instrument for power trading in Nigeria's electricity market. This document is essential when establishing long-term power supply arrangements between generators and buyers, whether they are distribution companies or eligible large consumers. The agreement must align with Nigeria's Electric Power Sector Reform Act and NERC regulations, incorporating specific requirements for pricing, technical standards, and operational procedures. It typically includes detailed provisions for power delivery, payment terms, performance standards, and risk allocation, while also addressing unique aspects of Nigeria's power sector such as grid stability, force majeure events specific to the Nigerian context, and local content requirements. The document is particularly crucial in project finance transactions and for demonstrating bankable revenue streams to potential investors and lenders.
