SERVICES TO GENERATION 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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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.
Tempo Energy – Advisors with AF Colenco to the Tempo/ Vigeo/ NNPC consortium
on the development of the Ogidigben 1000MW CCGT power project.
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.
Recent Projects:
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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.
ANED - Advisors to the Association of Nigerian Electricity Distributors, the “Disco
Roundtable” on regulatory, commercial and power market matters.
Ibadan EDC – Advisors on regulatory, tariff, commercial and power market matters to
the management and shareholders of Ibadan Electricity Distribution Company.
Abuja EDC, Enugu EDC, Kano EDC, Jos EDC, Yola EDC, Benin EDC – Advisors on
regulatory, commercial and power market matters.
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.
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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
We can provide advice and support in the following areas:
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Settlement Statement, Tariffs, Volumes and Losses.
Billing System.
Regulatory Monitoring and Support.
PPA Administration and GSA Administration.
Financial Modelling and Planning.
Board Advisory, Ad Hoc Support and Horizon Watch.
Training and Capacity Building.
Settlement Statement; Tariffs, Volumes and Losses
The Market Operator, ONEM has been issuing Preliminary Settlement Statements around the
9th of each month and final statements around the 20th. The statements have been
characterised by use of rates different to those expected by Sellers and by calculations that
are not consistent with the Interim Rules and NERC orders.
We can review each statement for consistency with the Interim Rules, the Market Rules, the
MYTO Order, the MYTO Model, PPA’s and the ‘Existing Arrangements’1. We can highlight
errors and inconsistencies and prepare a statement of dispute for the Client to submit to the
MO and NERC.
Billing System
Genco revenue will be billed through the Market Operator for all generation costs, under the
PPA and the regulated tariffs under the MYTO II. This is built up from declarations of capacity
hour by hour through the month and hour by hour Availability and Despatch. The work
involved to produce an accurate and comprehensive invoice is substantial and automating
this is to be recommended. Given the large amounts of money involved it is imprudent to
rely on the Market Operator and their systems without access for detailed and regular
verification. We can advise on:
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Systems and procedures to verify the monthly invoicing;
Metrology, telemetry and software development for invoice production and checking;
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Development and training of staff to administer the system.
means the established structures and procedures followed by Participants and Service Providers prior to the
commencement of the Interim Period
PPA Administration/ GSA Administration
PPAs and FSAs are complex documents that require great care and diligence in
administration if revenue streams are to be maximised and billing errors eliminated. We can
advise on:
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Administration and invoicing for PPAs and GSAs;
Provide automated billing solutions with meter telemetry; and
Periodic audit and review of invoicing, billing and contract compliance.
Regulatory Monitoring and Support
The capacity and energy tariffs are regulated at present. The MYTO Order sets these out,
amended by letters from the regulator, and based on the MYTO Model. The commercial
contract – the PPA – has been superseded by the Interim Rules. Monitoring the regulatory
changes and responding to draft documents and orders from NERC is critical to preserving
the Company’s commercial position. We can:
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Monitor regulatory changes and consultative documents issued by NERC;
Advise the Client on the impact of these on the business;
Prepare draft responses and submissions for the Client to submit; and
Assist in negotiations and discussions with NERC.
Regulatory 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 of reporting systems; and
Undertake audits of reporting to ensure full compliance.
Technical and Financial Modelling and Planning
We have detailed technical and financial models of thermal plant operation and performance
– GenPlan - that are kept up to date with regulatory changes and developments. They
provide support to clients in understanding the impacts of tariff and other changes and
explaining the impacts to Lenders and Investors.
We have a detailed AC Load Flow simulation model of the entire transmission system –
TransPlan that runs on PSS/E proprietary software using a comprehensive database of two
Nigerian Transmission System and input from our own GenPlan. It will allow us to assist
clients with projections of evacuation capacity over time and particularly the likely load
factors for planned plant expansions. We can:
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Maintain a detailed financial model for the Plant and project future performance; and
Train company staff in its use and maintenance.
Board Advisory and Training
Each Genco and power project 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 the
power market will operate and how power tariffs are negotiated and agreed, how power is
bought and sold and how different technologies and fuel options will be competitive over
time. Our team has an unrivalled knowledge of the detailed operation of the power market
and contracts within the sector. We can provide:
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A sanity check on company strategy and business plans;
Alerts on the impact of changes in the market rules and regulatory framework;
Board training to develop understanding of the power sector in Nigeria and the
commercial opportunities that exist; and
Board counselling and support to Board meetings on strategy, financial, commercial
and regulatory aspects of the power sector as required.
Training and Capacity Building
Operation of the newly formed Gencos 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;
Settlement Statement administration; and
PPA and GSA administration and operation.
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 14 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