Appendix
E. Detailed Risk Register
Full risk register with category, likelihood, impact, mitigation owner, and residual risk after mitigation. Likelihood and impact are scored qualitatively on a Low / Medium / High scale.
Macro and political risks
| Risk | Likelihood | Impact | Mitigation | Owner | Residual |
|---|---|---|---|---|---|
| Naira depreciation to ₦2,000+/USD | High | Medium | USD-indexed PPA; carbon credit USD revenue; offshore buffer for loan repayments | CFO | Low |
| Federal Electricity Act amendment or reversal | Low | High | Existing PPAs grandfathered; multi-state platform by Year 5 | Country head | Medium |
| 2027 presidential transition reverses sector reform direction | Medium | High | Diversification across states; DFI political risk insurance | Board | Medium |
| Nigerian banking crisis freezes naira working capital | Low | High | Offshore USD buffer; access to multilateral emergency facilities | CFO | Medium |
| Sustained 24+ month industrial recession in Lagos | Low | High | Portfolio diversification across sectors; no single customer >15% revenue | Commercial Director | Medium |
Counterparty risks
| Risk | Likelihood | Impact | Mitigation | Owner | Residual |
|---|---|---|---|---|---|
| Tier-1 anchor customer defaults Years 4 to 10 | Medium | High | Portfolio of 8 to 12 anchors; political risk insurance on largest two | Commercial Director | Low |
| Co-investor exit or capital call failure | Low | High | Rights to buy out the exiting partner; the right to sell alongside them; a roster of replacement candidates | Board | Low |
| EPC contractor bankruptcy mid-construction | Low | High | Performance bonds; replacement contractor pre-qualified | Operations Director | Low |
Operational risks
| Risk | Likelihood | Impact | Mitigation | Owner | Residual |
|---|---|---|---|---|---|
| Construction overrun beyond 12% contingency | Medium | Medium | Fixed-price EPC with liquidated damages; phased construction funding draws | Operations Director | Low |
| Battery degradation worse than spec | Low | Medium | Tier-1 supplier warranty; conservative model assumptions; replacement reserve | Operations Director | Low |
| Anchor plant outage during peak demand | Medium | Low | Battery dispatch; backup interconnection; insurance | Operations Director | Low |
| Lagos coastal flooding damages plant | Low | High | Inland siting (Ibeju-Lekki, Epe, Badagry); elevation requirements; insurance | Operations Director | Low |
Regulatory and compliance risks
| Risk | Likelihood | Impact | Mitigation | Owner | Residual |
|---|---|---|---|---|---|
| LASERC interconnection or wheeling approval delayed | Medium | Medium | Pre-application engagement from Month 1; phased construction | Country head | Low |
| NCCC carbon credit registration rejected or delayed | Low | Low | Starsight precedent; Verra/Gold Standard as backup | Sustainability lead | Low |
| ESG commitments to senior lenders breached | Low | High | IFC Performance Standards from design phase; quarterly reporting | CFO | Low |
| Local content quota changes mid-project | Medium | Low | Nigerian sub-contractor pipeline; flexible procurement | Operations Director | Low |
Reputational and political risks
| Risk | Likelihood | Impact | Mitigation | Owner | Residual |
|---|---|---|---|---|---|
| Anti-foreign-ownership backlash | Low | Medium | Nigerian co-investor majority public face; local hiring | Country head | Low |
| Community grievance escalation at plant site | Medium | Low | Community engagement plan aligned to IFC Performance Standards; community benefit fund | Operations Director | Low |
| Adverse media on Katsina precedent | Low | Low | Transparent communication; Katsina lessons-learned positioning | Country head | Low |
How risks are accepted
Two risks are accepted rather than mitigated:
- A federal banking crisis correlated with broader macro collapse. Project-level hedging cannot cover system-wide liquidity failure.
- A complete collapse of the Lagos C&I customer base sustained beyond 24 months. The business model assumes continued industrial activity in Lagos.
These are not project-specific exposures and are accepted as part of operating in a frontier market.
Risk review cadence
The risk register is reviewed quarterly by the SPV board for the first three years, semi-annually thereafter. New risks are added by the country head as identified. Risks that reduce to Low residual for four consecutive review cycles are archived.
32 / 35JCM Power · Lighting Lagos · MBA 662