SERVICES TO DISTRIBUTION COMPANIES
AF MERCADOS EMI
Abuja, Edinburgh, Madrid, Ankara
About AF Mercados
AF Mercados are the leading consultancy working for power and utility companies,
regulators, traders, power market operators and policy makers in electricity and gas around
the World. We have been working in Nigeria since 2002.
AF Mercados has been a major adviser during the restructuring of the Nigerian Power sector
to NERC, BPE and PHCN, and has built a deep understanding of the regulatory and power
market frameworks. Our deep knowledge of the power market in Nigeria is built on
unrivalled project experience. AF Mercados has leveraged that knowledge to provide
authoritative ongoing advice to 9 of the 11 privatised discos, 1 genco and a number of IPP
developers in the newly privatised business environment.
AF Mercados has around 60 staff with offices in Abuja, Edinburgh, Madrid, The Hague and
Ankara.
AF Mercados is a subsidiary of AF Consult (www.afconsult.com), a 7000 strong international
engineering and consultancy firm quoted on the Swedish Stock Exchange, and a sister
company to AF Colenco, a long established international name in power engineering and
also with a substantial presence in Abuja.
AF Mercados Experience in Nigeria
AF Mercados has been working in Nigeria since 2002. Projects on which Mercados have
worked include:
Ongoing Projects:
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ANED - Advisors to the Association of Nigerian Electricity Distributors, the “Disco
Roundtable” on regulatory, commercial and power market matters.
•
Ibadan EDC and Yola EDC – Advisors on regulatory, tariff, commercial and power
market matters to the management and shareholders of Ibadan Electricity
Distribution Company.
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Abuja EDC – Advisors on regulatory, commercial and power market matters.
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Enugu EDC – Advisors on regulatory, commercial and power market matters.
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Kano EDC – Advisors on regulatory, commercial and power market matters.
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Jos EDC – Advisors on regulatory, commercial and power market matters.
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Benin EDC, Ikeja EDC, Eko EDC – Advisors on regulatory and tariff filing matters
•
Amber Energy – Advisors on all regulatory, commercial, market and technical
matters for the development and implementation of a 100MW OCGT IPP in Benin
State.
•
Nova Power - Advisors to Nova Power on the development and construction of
2000MW of solar power projects across Nigeria.
•
Quantum Power - Advisors to Quantum Power on regulatory and commercial
matters for the development of the Yellowstone IPP Project.
•
Yellowstone Consortium - Advisors to Quantum Power as lead investor in the
Yellowstone Consortium in their negotiations to acquire Geregu thermal plant as part
of the NIPP privatisations.
•
Century Power – Working with AF Colenco to advise on due diligence to the
Investors for the Okija IPP.
•
Bresson Energy – Advisors on the development of a 90MW OCGT IPP using LM6000
technology.
•
Mainstream Energy - Advice to successful bidder for Kainji/Jebba Hydro Electric
Power Company on the concession arrangements with the Federal Government of
Nigeria and ongoing advice on refurbishment and rehabilitation.
•
Westron Consortium – Advisors to a group of potential investors in the Nigerian
transmission system on the basis whereby private investment could be
accommodated within the legal and regulatory framework.
Recent Experience
•
Century Power – Commercial and technical due diligence on the potential
acquisition of the Akwa Ibom plant.
•
PHCN Privatisation -Transaction Advice to bidders for 6 Discos and 3 Gencos in the
2012/2013 privatisation of PHCN. Out of these bids, 5 were declared preferred
bidders and 2 reserved bidders.
•
NIPP Privatisation - Transaction Advisory to bidders for 6 of the NIPP generation
projects in 2013 including due diligence and business plan preparation.
•
BPE - Short term market design advisor to the Government of Nigeria and BPE:
Developed the Market Rules for the Nigerian Electricity Market in operation.
•
NERC - Advice on the Set up and Establishment of NERC.
•
TCN - Advisory services in the organisation and functioning of the Transmission
Company of Nigeria.
•
PHCN - Advice on the Restructuring and Unbundling of PHCN into 18 Successor
Companies.
•
Study of framework performance contracts for power utilities in Nigeria
Our Services
Regulation and Tariffs.
The operation of the MYTO II and the 6 monthly review periods will be critical to Disco
revenues and profitability. We can advise on:
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Opening Losses Calculation.
Regulatory Financial Models.
Tariff Review formulation.
Regulatory Submissions and Negotiation.
Cost of Service Studies
Tariffs are meant to reflect the costs of service but as customer numbers in MYTO seem to
be exaggerated and as technical losses are reduced the cost of supplying different classes of
customer will need to be recalculated if revenue is to be maintained. We provide:
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Cost of service studies.
Negotiation with NERC to facilitate tariff adjustment.
Administration of the Vesting Contract and Balancing Compensation Mechanism
Some 60-70% of Disco costs will be billed through the Market Operator for generation costs,
under the Vesting Contract, the Balancing Compensation mechanism under MYTO II and fees
from the Industry bodies. We can advise on:
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The checking and accuracy of monthly invoices
Systems and procedures to verify the monthly charges
Software development for invoice checking
Investment Planning and Procurement
In collaboration with AF Colenco, our sister company based in Abuja, we can assist with:
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Network Planning and Investment Masterplans.
Equipment specification.
Procurement and Contract Management.
Regulation Compliance
The regulatory reporting requirements are onerous and demanding. Mercados can:
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Undertake reporting on a client’s behalf;
Train client’s personnel on reporting and set up reporting systems;
Undertake audits of reporting to ensure full compliance.
Power Procurement
Additional power will be a key driver to a successful disco and this could come from some or
all of Embedded Generation, Renewable Generation or bilateral contracts with IPPs. We can
assist with:
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Strategy for procuring additional power from Embedded Generation, Renewable
Generation and IPPs.
Power project procurement.
Power project development for Renewable or Conventional Fuels.
PPA formulation and negotiation.
Training and Capacity Building
Operation of the Discos will require new skills in regulation and regulatory affairs, in contract
administration, in power development and procurement. We can provide tailored training
and capacity building in:
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Regulation and Regulatory Affairs.
Power project development.
Power procurement and power trading.
PPA and Vesting Contract administration and operation.
Board Advisory
The complexity of the regulatory and market arrangements means that there are constant
pitfalls to be avoided as the company develops and implements its strategy and a continuing
need for vigilance. There are also opportunities to enhance returns. Our team has an
unrivalled knowledge of the detailed operation of the regulations and contracts within the
sector. As Board Advisors we can:
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Provide a health and sanity check on company strategy and business plans.
Provide alerts on the impact of changes in the regulatory and contractual framework.
Regular reviews of strategies and business plans.
Attendance at relevant parts of Company Board meetings.
Boardroom Training
Each Disco will need to operate in a complex legal, regulatory and market environment
where the key to future profits will be a deep understanding of how tariffs are set and
reviewed, how power is bought and sold, and how technical and commercial losses impact
revenues. We can provide:
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Overview of the licensing framework.
Regulation and the Setting of Tariffs.
The impact of technical and commercial losses.
Purchase of power and the Vesting Contract, the Bulk Trader and Market Operator.
The Balancing Compensation Mechanism.
Procurement of additional power and power trading.
Opportunities in Embedded Generation and Renewables.
Our Team
Rahila Thomas
Rahila is a Consultant with over 14 years’ experience in the
power sector. She has a Masters degree in Energy Finance. She
previously worked as Technical Adviser on the Regulatory &
Transaction Team of the Presidential Task Force on Power and
held several advisory positions to Ministers of the Power Sector.
She was also a core member of the BPE Electric Power Team
driving the Nigeria power sector reform programme. She
currently manages Mercados activities in Nigeria.
Robert Yates
Robert is a Director of AF Mercados. He is an economist,
management scientist and certified accountant. He has over 35
years’ experience in advising on major transactions in power
and gas with expertise in regulation, markets, contracts,
financing and risk. He has 14 years’ experience in Nigeria. He
has advised discos, gencos, IPPs, PPP in transmission, NERC, BPE
and NNPC among others.
Jennifer Ifeanyi-Okoro
Jennifer is a dual licensed energy and transactional attorney in
the U.S and Nigeria. She has experience as a Contracts
Administrator at Venable LLP, Baltimore in the USA, as the head
of Legal and Regulatory Affairs with Port Harcourt Distribution
Company and as Counsel with Geometric Power in Nigeria.
Chigoziri Egeruoh
Chigoziri is an expert in power systems and transmission
networks. He has Masters degrees from TUDELFT and from
UPComillas in Madrid. He has 6 years’ working experience and
has played a key role in the development of the AF Mercados’
network models of the Nigerian Power System.
Busola Awoniyi
Busola is a power sector expert with over 10 years’ experience in
electricity generation and distribution with strong financial,
regulatory and corporate strategy skills. She has a vast
understanding of the Nigerian electricity markets and
regulations
with
extensive
Government
collaboration
experience. Prior to joining Mercados, she led Tariff and Market
Operations Teams at PEC Energy, a US based distribution
company.
Alice Waltham
With over 10 years’ working experience Alice is a renewable
energy specialist with expertise in the regulation and promotion
of renewables in competitive power markets. Prior to joining AF
Mercados she led the renewable energy team at IPA Economics
and was a regulatory advisor to Good Energy. In Nigeria she has
advised discos on the operation of the regulatory framework
and the Interim Market.
Tom Jardine
Tom is an engineer who has over 35 years’ experience in the
international power industry including 18 years in consulting
and over 14 years in Nigeria. He has advised extensively on
privatisations, acquisitions and financing in the international
power market with expertise in transaction documents, industry
documents and modelling.
Dan Eager
Dan has 4 years’ experience in the dynamic modelling of power
systems and of AF Mercados’ proprietary software tools. His
experience includes developing an electricity dispatch model of
Great Britain, providing the UK Government with tools to
support international fuel price forecasting, and regulatory
valuation models for the Botswana power sector. He has
advised disco operators in Nigeria on tariffs, MYTO and financial
projections.
Annina Palin
Annina is an Analyst with over 2 years’ experience in the power
sector. She supports clients in Nigeria and worldwide on a
number of assignments including generation forecasting,
transmission modelling and tariff analysis. She has a Masters
degree in Operational Research from the University of
Edinburgh.
More Information
www.mercados.ng
www.afconsult.com
Contact Details
Rahila Thomas
Suite 202a
1st Floor, Midel Centre
Plot 14 Oladipo Diya Way
Sector Centre D
Gudu
Abuja, Nigeria
Robert Yates
Suite 43-44
1 St Colme Street
Edinburgh
United Kingdom
EH3 6AA
[email protected]
T: +234 (0) 802 314 3987
[email protected]
T: +234 (0) 8100160065/ +44.7811.332688