Appendix
B. Detailed Financial Model
Full base-case financial model for the anchor plant plus first three C&I sites. All figures are illustrative, calibrated against published Sub-Saharan utility-scale solar benchmarks (IRENA, Berkeley Lab Energy I-SPARK, JCM Malawi disclosures, Konexa NBP2 MIGA documentation). A working Excel model would replace these tables at deal closing.
Project sizing
| Item | Value |
|---|
| Anchor plant capacity | 50 MW PV + 25 MWh battery |
| Initial C&I portfolio | 3 sites totaling ~25 MW |
| Total installed capacity (Year 3) | ~75 MW |
| Annual generation (steady state) | ~135 GWh |
| Capacity factor | 22% (Lagos solar, shading and degradation adjusted) |
Construction cost breakdown
| Cost category | $M | % of total |
|---|
| Solar PV modules | 36 | 18% |
| Battery storage systems | 28 | 14% |
| Inverters and electrical balance-of-system | 22 | 11% |
| Civil and mechanical works | 24 | 12% |
| Grid connection and metering | 12 | 6% |
| Land acquisition and rights | 8 | 4% |
| Permitting and licensing | 4 | 2% |
| Development and financing costs | 26 | 13% |
| Interest during construction | 20 | 10% |
| Contingency (12%) | 20 | 10% |
| Total project cost | 200 | 100% |
How the money is raised
| Source | Provider | Amount ($M) | Term | Indicative cost |
|---|
| Owners' equity | JCM (60–70%) + Nigerian co-investor (30–40%) | 50 | 20-yr hold | 14–16% target return |
| Senior debt (development finance) | FinDev, EDC, IFC, AfDB | 100 | 18–20 yrs | SOFR + 3.5–4.5% (a floating USD benchmark rate) |
| Naira commercial debt | Stanbic IBTC, Access Bank | 30 | 5–7 yrs | MPR + 2–3% (the Nigerian central bank policy rate) |
| Below-market concessional loans | Canada-IFC REPA, DARES | 20 | 25 yrs | 1.0–2.0% |
| Total | | 200 | | |
Revenue and operating economics
| Line item | Year 1 | Year 5 (steady state) |
|---|
| PPA revenue (USD-equivalent) | 8.2 | 11.0 |
| Carbon credit revenue | 1.0 | 2.0 |
| Total revenue ($M) | 9.2 | 13.0 |
| Operations and maintenance | 2.4 | 2.6 |
| Insurance and overhead | 1.6 | 1.8 |
| Land lease | 1.9 | 1.9 |
| Operating expense ($M) | 5.9 | 6.3 |
| Operating profit, EBITDA ($M) | 3.3 | 6.7 |
| Operating margin | 36% | 52% |
Return metrics (base case)
| Metric | Value |
|---|
| Return to owners (equity IRR, 20-year hold) | 14–16% |
| Owners' payback period | 4.5 years |
| Project return before borrowing (project IRR) | 9.5–11% |
| Loan repayment cushion (DSCR, average) | 1.45x |
| Loan repayment cushion (DSCR, minimum under stress) | 1.15x |
| Levelized cost of electricity (LCOE) | ~$0.062/kWh |
| Anchor PPA tariff | ~$0.085/kWh (with 2.5% annual price increase) |
Sensitivity analysis
| Stress scenario | Base return | Stressed return | Verdict |
|---|
| Naira to ₦2,000/USD | 14–16% | 13–15% | Tolerable (PPA indexing absorbs) |
| One missed PPA, Years 1–3 | 14–16% | 12–14% | Tolerable (portfolio model has redundancy) |
| Construction overrun +12% | 14–16% | 12–13% | Tolerable (contingency absorbed) |
| One Tier-1 customer default, Year 5 | 14–16% | 10–12% | Tolerable (loan cushion holds at 1.2x) |
| Federal reversal of Electricity Act | 14–16% | N/A | Project failure (no mitigation) |
| Sustained Naira ₦3,500+/USD with no PPA indexing relief | 14–16% | Under 8% | Distress (refinancing required) |
The model holds up under the realistic stress scenarios. The fail conditions are tail risks correlated with broader macro and political collapse.
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