F. Katsina Project: Detailed History

The detailed history of JCM Capital's Katsina solar project, 2014 to 2022, and what it produced beyond the headline outcome of zero megawatts built. This appendix supports the analysis in the "JCM's Own Lesson" slide.

The cohort

In July 2016, the federal Nigeria Bulk Electricity Trader (NBET) signed Power Purchase Agreements with fourteen solar IPP developers simultaneously, totaling 1,125 MW of contracted capacity at a uniform tariff of $0.115/kWh over 20 years^[…]. JCM Capital, through its local partner Pan Africa Solar, was one of the fourteen. The project sited in Katsina State was 75 MW.

The cohort was meant to demonstrate that Nigeria could scale utility-scale solar quickly through a federal procurement model. The 14 PPAs were the largest single round of solar contracting in Sub-Saharan Africa to that point.

The optimism at signing

At the signing, JCM co-founder Justin Woodward described Nigeria's framework as "well-structured" and praised "the level of operational clarity that investors require"^[…]. He was speaking in good faith about the framework as it existed in 2016. The framework did not survive contact with the macro environment of 2016 to 2022.

What JCM did complete

The Katsina project did real work before collapsing. The full work product included:

• A 20-year PPA signed with NBET at $0.115/kWh
• A 40-year Certificate of Occupancy on 209 hectares in Katsina State
• A completed Environmental and Social Impact Assessment under African Development Bank standards^[…]
• FMO engaged as lead arranger for the senior debt syndicate
• Site survey, geotechnical work, and grid interconnection design completed
• Local stakeholder engagement and community benefit framework agreed

This is not a project that died at the planning stage. It died at financial close, with most pre-construction work complete.

Why financial close never happened

By 2019, the PPA had been extended once. By 2022, none of the 14 cohort projects had reached financial close. The combined 1,125 MW failed to build a single megawatt^[…].

The structural causes were three, all of which the main deck's "Same Three Causes" analysis names:

1. NBET's creditworthiness collapsed. The federal off-taker that signed all 14 PPAs lost its standalone credit quality as the broader sector liquidity crisis (DisCo collection failures, federal subsidy arrears, tariff freezes) progressed through 2017 to 2021.

2. The $0.115/kWh USD tariff became politically untenable. As the naira depreciated from approximately ₦197/USD at signing in 2016 to ₦400+ by 2020, the same USD price translated to a much higher naira retail cost. The Nigerian government sought to renegotiate the tariffs downward. JCM and the cohort refused.

3. World Bank guarantees required to support the off-taker risk were never issued. JCM's own project page attributes the delay to "the World Bank and lenders" withholding guarantees pending implementation of Nigeria's Power Sector Recovery Plan^[…]. The Recovery Plan did not implement on the timeline lenders required.

What JCM took away

The Katsina experience gave JCM specific operating knowledge that informs the current Lagos proposal:

• Direct experience with NBET as counterparty (it cannot be the counterparty again)
• Direct experience with the World Bank guarantee process in Nigeria (its timeline cannot be assumed)
• Working relationships with FMO and the AfDB on Nigerian project finance
• A standing land position and EIA in Katsina, which could be reactivated in a future state-level structure if Katsina State operationalizes the 2023 Electricity Act
• Direct knowledge of the cohort's other 13 developers, several of whom are still active in Nigerian solar in the post-2023 framework

The Lagos proposal is not the first iteration of a Nigerian strategy for JCM. It is the second iteration, with the structural failures of the first now visible.