Analysis
JCM's Value Chain in Nigeria
The industry value chain for utility-scale solar, compared across three structures: JCM's current operating chain in Malawi, the Nigerian federal model that has failed twice, and the Lagos bypass model proposed in this deck.
Malawi (JCM today)
JCM's Salima and Golomoti operating chain
JCM Generation
ESCOM (T+D+Offtake)
End User
Nigeria Federal Model
What killed Enron 1999 and Katsina 2014 to 2022
GenCo
TCN
DisCo
End User
Lagos Bypass (proposed)
JCM's Electricity Act 2023 design
JCM Generation
LASERC Wheeling
C&I End User
Illustrative estimates based on: Renewable Watch (2025) EPC cost breakdown; Berkeley Lab Energy I-SPARK utility-scale PV cost share; project disclosures from JCM Salima and Golomoti and Konexa NBP2.
Revenue Share by Stage (%)
Generation
Transmission
Distribution / Offtake
End User
Gross Margin by Stage (%)
Generation
Transmission
Distribution / Offtake
End User
Chain compression
Bypass model reduces the Nigerian chain from four actors to three by eliminating the DisCo offtaker layer.
Counterparty quality
C&I customer credit in Lagos beats DisCo credit in the federal model. Same revenue at lower default risk.
Wheeling localized
LASERC short-distance wheeling avoids TCN bottleneck. Transmission share falls from 15% to 10%.
Generator margin captures the difference
JCM Generation margin rises from 15% in Malawi to 22% in Lagos by absorbing the DisCo and transmission share the bypass eliminates.
The federal Nigerian chain has the most actors and the worst economics. Four players, with the DisCo layer absorbing 30% of revenue at 3% margin. Generator margin sits at 10% because tariffs are USD-fixed against a depreciating naira and DisCos chronically reject load. This is the structure that killed Katsina.
JCM's Malawi chain is shorter and cleaner. Three actors. ESCOM aggregates transmission, distribution, and bulk offtake into a single World Bank-backed counterparty. Generation margin reaches 15%. The trade is steady returns for predictable revenue.
The Lagos bypass chain shortens further and changes the counterparty. Three actors, with the DisCo layer gone. JCM Generation captures 70% of revenue at 22% margin by keeping the share the federal chain hands to TCN and DisCos. The counterparty is a portfolio of C&I customers buying under direct USD-indexed PPAs, not a single utility.
The structural argument
The Malawi chain works because the offtaker is creditworthy and the chain is short. The federal Nigerian chain fails because the offtaker is not creditworthy and the chain is long. The Lagos bypass applies the Malawi lesson in a market where the creditworthy counterparty is private.