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1... The Future of Power Generation

Company Profile

... The Future of Power Generation


1

2

3

Overview of NSP’s Operating Environment

NSP: An Emerging Power Sector Giant

Asset Profile

03

07

13

Outline

4 Management Strategy and Outlook 20

For discussion purposes only | Private and Confidential


... The Future of Power Generation 3

Overview of NSP’s Operating Environment

Section One


66%

13%

20%1%

Natural Gas

Oil

Hydro Power

Non-Hydro Power (Renewables)

Nigeria has one of the largest natural gas reserves in the world. Natural gas serves as

the main fuel source of electricity in Nigeria. Despite the abundance of natural gas,

power output gap (based on potential power requirements) in Nigeria has remained

substantial over the years.

The sector depicts signs of expansion as real GDP growth will continue to accelerate

in Nigeria over the coming quarters, benefitting from an uptick in crude oil production

and rising government spending - afforded by higher commodity prices.

The electricity, gas, steam and air conditioning sector contributed 0.39% to real GDP

in 2017, compared to 0.34% in 2016

The sector contracted by 16.43% in 2017 mainly as a result of increased generation

and successful peace talks in the Niger Delta

Nigeria in 2017 had a total power generation of 27.6TWH, net consumption of

24.9TWH and net capacity of 13,710MW. Thermal power – mainly oil and gas –

constituted the majority of power generation, at 80%; hydropower made up a further

19.9%, with limited contributions by non-hydropower renewable sources.

5363130159187201215298

858

1,183

LibyaKuwaitIraqAlgeriaNigeriaVenezuelaUAESaudi

Arabia

QatarIran

Nigeria’s gas profile, amongst select OPEC member states

200 – 500mw

>500mw

Installed capacity

Gas Thermal plants

Hydro-electric plants

Plant Type

Oyo

Ekiti

Ondo

Cross

River

Anambra

FCT

Benue

Taraba

Niger

Kwara

Kebbi

Zamfara

Sokoto

Katsina

Jigawa

Kano

Kaduna

Plateau

Bauchi

Gombe

Yobe

Borno

Adamawa

Ogun

Edo

Delta

Enugu

Akwa

Ibom

Ebonyi

Imo

Enugu

Lagos

Rivers

Abia

Nasarawa

Shiroro

Kogi

Nigeria’s Power Sector Profi le

Overview Power Generating Companies in Nigeria

Power Generation MixGas Reserves (TCF)


Industry Model

End Users

Source of Fuel

Hydro Energy

Natural Gas(NGC & GACN)

Others

PHCN Successor (6)

GenCos

IPPs

NIPP Power Stations (10)

(System Operator)

Transmission Company of

Nigeria

(Market Operator)

PHCN Successor DisCos (11)

Embedded Generation

Captive Power

Generation

Primary Energy

Cashflow

Electricity Flow

Nigeria Bulk Electricity Trading Company

DistributionTransmissionGeneration

▪ Embedded GenCos: The sector structure permitsgeneration companies to supply directly todistribution companies with the tariffs approvedby NERC

▪ Captive Power: End users procure power directlyfrom (third party) suppliers on site (usuallyrelatively small given the need to have all outpututilised on site). No TCN or DisCo networks utilised.Private to private sales (terms to be commerciallyagreed)

Note:1 Gas prices are regulated2 End users provide the cashflow which is distributed through the entire value chain

Nigerian Electricity

Regulatory

Commission (NERC)

Responsible for undertaking

technical and economic

regulation of the Nigerian

Electricity Supply Industry

Nigerian Bulk

Electricity Trading Plc

(NBET)

Engages in the purchase of

electrical power and ancillary

services (from independent

power producers and the

successor generation

companies) and subsequent

resale to distribution

companies and eligible

consumers

Operator of the

Nigerian Electricity

Market

Responsible for the operation

of the electricity market and

settlement arrangements

Nigeria System

Operator

Responsible for the planning,

dispatch and operation of the

transmission system

Gas Aggregation

Company Nigeria

Limited

Responsible for stimulating

growth of natural gas

utilization in the Nigerian

domestic market and is the

vehicle for the implementation

of the Nigerian Gas Master

Plan (NGMP) commercial

framework

Industry Structure

PHCN: Power Holding Company of Nigeria GenCos: Generation Companies IPPs: Independent Power Producers

DisCos: Distribution Companies

Key Regulators


Huge Supply Demand Gap: Sufficient Room for Growth

Nigeria Power Output Gap Analysis

12,522

3,879 3,592

1,864

3,262

287 1,746 447

1,065

5,381

5,338

216

4,055

7,200

Installed

Capacity

Non-Available

Capacity

Non-Operational

Capacity

Available

Capacity

Transmission

Losses

Transmitted Distribution

Losses

Distributed

-75%

c.7.4% transmission

loss

c.12.5% technical

loss

Estimated additional capacity

Generation Transmission Distribution

Commentary

► Only ~25% of Nigeria’s 12,522MW installed capacity reaches the

end user. Widespread inefficiency means that only 3,879MW of this capacity is operational with ~3,600MW transmitted and ~3,100MW distributed

Source: Nigeria baseline report




NSP: An Emerging Power Sector Giant

Section Two


Mission:

“To be a foremost power generating company”

A Pan African Generation Company with a Growing Portfolio

About North South Power

North South Power Company Limited was established in 2012 to own and operate a diverse and growing portfolio of electricity generation businesses across

Africa

To be the leading power generation company in Sub-

Saharan Africa focused on safely providing reliable and sustainable

power

NSP is currently advancing plans to commence construction of its

300MW solar farm which will enable the Company continue to

provide an average of 8% of Nigeria’s power, whilst aiming to meet its target to provide 10% of

Nigeria’s power

Overview Strategic Intent Outlook

Mission, Vision and Core Values

Vision:

“To consistently generate reliable power in line with

international best practices, driven by innovation and

excellence”

Excellence in Service Delivery

Teamwork

Manage our power plants for use in

perpetuity

Power Interests

Hydro Solar Wind Biomass

Key Highlights

Provides Power to >10 million people

Generates ~8% of Nigeria’s power

~20% up from 2015 generation output

47% - 3yearRevenue CAGR

A-

Recent Rating (2018)

A-Highest rating for any company in the Power Sector

Dignity of Individual


Sound Operating Track Record with Milestone Achievement

In Recent Years…

Commentary

► Over the years, the Company has grown to become one of the most efficient power generating companies in Nigeria, contributing over 8% to the country’s power output

History and Key Milestones

NSP was incorporated as a

limited liability company to own

and operate a diverse and

growing portfolio of electricity

generation

North South Power Company

Limited entered and won a

competitive bid process for a 30

year concession of Shiroro

Hydroelectric Plc

Launched expansion/ business

diversification drive into

Renewable Energy space

Incorporated Shiroro Solar

Generating Company Limited to

execute solar power generation

project

Activation of NSP’s PPA with NBET

Achieved key terms of

Performance Agreement with

BPE, 30 months before target

date

NSP won the 25 year concession

of the 30MW Gurara

hydroelectric power plant

located in kaduna state taking its

total asset generating capacity

to 630MW

NSP is currently responsible for

8% of Nigeria’s Power Generation

and has a target to generate

over 10% of Nigeria’s power by

2020

2012 2013 2015 2016 2017 2020


The Company has boosted output generation to the highest

level since commissioning of Shiroro…

Key Achievements

Ac

ce

lera

ted

De

liv

ery

Op

era

tio

na

l Ex

ce

lle

nc

e

1 ▪ North South Power in 2013 executed a Performance Agreement with the Bureau of Public Enterprises which required recovering capacity of the Shiroro

Hydroelectric power plant to its name plate capacity.

Unit 1

Unit 2

Unit 3

Unit 4

November 2013 April 2016

Name Plate Available Cap. Issue Name Plate Available Cap. CAPEX Spend

150 MW

150 MW

150 MW

150 MW

0 MW

150 MW

150 MW

150 MW

Overdue for overhaul

& Generator winding1

Overhauled

Overdue for

overhaul

Damaged underwater

intake gate & overdue

for overhaul

150 MW

150 MW

150 MW

150 MW

150 MW

150 MW

150 MW

150 MW

US$2 mn

N/A

c.US$2.68 mn

c.US$10 mn

2

2.061.86

2.69

2.23

0.0

1.0

2.0

3.0

2014 2015 2016 2017

Mill

ion

s

Output

Coming off a 10% decline in output in 2015, NSP made remarkable progress in generating output as

high as 2,687,790MWH, representing 52% of utilization in 2016 and about 45% increase over power

generation compared to 2015. This generation output also represents the highest annual generation

since the commissioning of Shiroro Hydro Electric Power Plant in 1990

► Excellent Labour Relations and High Employee Morale: No work

stoppages and the Company has been able to pay salaries on

time despite liquidity challenges. The Company in 2017 paid

productivity bonus and increased salary for the first time

► Excellent Safety Record (Zero fatalities): Highly improved work

safety ethics with provision of safety wears. 1 lost time accident

from which the affected employee has fully recovered

► No environmental breaches: Zero impact on host communities

during spillage

► No breach of NERC and Industry rules

Drivers


Good Corporate Governance Framework in l ine with set Best

Practice…

Board of Directors and Executive Management

Board of Directors Management

Chairman Non-Executive

Mallam Ibrahim Aliyu

(Chairman)

Engr. Emmanuel Katepa

Hajiya Rahmatu Yar’Adua

Engr. Sanni Ndanusa

Mrs. Irene Chigbue

Dr. George Nwangwu

Mr. Isaac Mate

Mr. Oladapo Peters

Mrs Sa’adiya Aminu

Executive

Dr. Olubunmi Peters (Executive

Vice Chairman / Chief

Executive Officer)

Executive Management Team

Dr. Olubunmi Peters (Executive Vice Chairman/CEO)

Engr. Daudu Abdul-Aziz (Executive Operating Officer)

Engr. Roland Lwiindi (Chief Technical & Commercial Officer)

Kolapo Joseph (GM, Corporate Finance & Business Development)

Ikechukwu Ibiam Okoli (GM, Internal Audit & Risk Management)

Norman kapambalala (GM, Account Services)

Ratio Legal Practitioners (Company Secretary)

Board Committees and Representations

Chairman

Non-Executive Directors

Finance and General Purpose Committee

Technical and Operations Committee

Remuneration and Human Resources

Committee

Audit and Risk Management

Committee

Safety Health and Environment

Total

Executive Director

5 6 6 6 6

Commentary

► NSP is headed by a highly experienced Board of Directors and Management Team, providing oversight and steering NSP’s progress

► NSP has ensured diverse, yet complementary

membership across all Board committees to ensure adequate checks and balances


. . . and supported by a strong and highly experienced

management team

Profile of Management Team

Executive Vice

Chairman/ CEO

DR. OLUBUNMI PETERS

Career and Educational Highlights

o He has served as Managing Director/CEO

of Federal Road Maintenance Agency

(FERMA) with 28 years of Public Service

Experience

o He is a Board Member of Roads Nigeria Plc,

Member of the Board of XDS Credit Bureau

Limited, Board of Trustee Shaw University,

Raleigh, North Carolina, USA

Executive Operating

Officer

ENGR. DAUDA ABDUL-AZIZ


o >30 years cognate experience

o He holds a B.Eng in Electrical Engineering

from Ahmadu Bello University and is a

graduate of the Power Systems Engineering

Course conducted by GE Power Systems,

Schenectady, New York, USA

GM, Accounting

Services

NORMAN KAPAMBALALA


o Qualified accountant with >18 years work

experience in financial reporting, financial

control and treasury management

o He previously held the positions of Finance

Director, Senior Manager Finance, and

Chief Accountant at ZESCO and was Senior

Reporting Accountant at CEC Plc.

o Holds an MBA degree

Chief Technical & Commercial

Officer

ENGR. ROLAND LWIINDI


o Experienced engineer with versatile

experience across business development,

project planning and implementation and

commercial arrangement

o He was responsible for feasibility studies for

hydro power development on the Luapula

River

GM, Internal Audit, Risk

Mgt and Tax

IKECHUKWU OKOLI


o >22years of professional working

experience in Auditing, Accounting,

Taxation and Financial Advisory Services

o He is a Fellow of the Institute of Chartered

Accountants of Nigeria and a member of

Chartered Institute of Taxation of Nigeria

GM, Corporate Finance & Business

Dev.

KOLAPO JOSEPH


o Versatile and innovative investment banker

with >13 years cognate experience in M&A,

Debt and Equity Capital raising, project

finance and financial advisory with Vetiva

Capital Mgt Ltd and United Capital Plc

o Holds a degree in Finance from University of

Maryland, College Park, U.S.A and MBA

from the University of Chicago, Booth

School of Business




NSP’s Asset Profile

Section Three


Asset Overview

Feasibility Studies carried out in the 1950s and revised in the early 1970s

Construction commenced in the mid 1979

Engineering consultants – Chas T. Main International Inc. (USA)

Contractors for civil structures: TORNO S.P.A. (Italy)

Main Equipment

suppliers Turbines –Andritz

Hydro (Austria) Generators: Koncar

(Croatia) Generator

Transformers: Toshiba (Japan)

Commissioned and commenced operations

Operated by NEPA until 2005 and upon restructuring of the industry operated by Shiroro Hydroelectric Plc, one of the PHCN Successor Companies

North South Power Company Limited awarded 30 year concession of Shiroro Hydroelectric Plc

1950 - 1970 1979 1990 1990 - 2005 2013

Progress Timeline

1. Shiroro Hydro Electric Power Station (Existing)


Asset Overview

Illustration

Overview of the Power Plant Generator – Turbine Shaft Coupler Generator Radiator

Overview of the Generator Generator Cooling Line Spillway Structure

1. Shiroro Hydro Electric Power Station


Asset Overview

1. Shiroro Hydro Electric Power Station (Existing)

Details

Location: ▪ Shiroro Local Government Area, Niger State, Nigeria

Ownership▪ Federal Government of Nigeria (concessioned to NSP under a 30-year

Agreement 2013)

Years Installed: ▪ 1989 – 1999 (commenced operation in 1990)

Installed Capacity ▪ 600MW (4 * 150MW units)

Typical Annual Energy Production ▪ 2,360 Gwh

Reservoir area at maximum storage ▪ 320 sq.km

Typical Head ▪ 97 m

Typical Station Capacity Factor ▪ 44%

% Contribution to Natural Grid ▪ 8%

Commentary

► Typical station capacity factor► 44%

► Connected to 6 lines that can evacuate 600MW each

► 330KV Shiroro – Abuja

► 330KV Shiroro –Gwagwalada

► 330KV Shiroro – Jebba

(2 Lines)

► 330KV Shiroro – Mando (2 Lines)


Asset Overview

2. Gurara Hydroelectric Power Plant (Ongoing)

Details

Location: ▪ Kachia Local Government Area, Kaduna State, Nigeria

Ownership: ▪ NSP

Typical Annual Energy Production ▪ 115GWH

Installed Capacity: ▪ 30MW

Turbine Capacity: ▪ 3 x 12.5MVA alternator (at 80% power factor)

Target Commencement of Operation: ▪ 2019

Evacuation:

▪ Development is ongoing on the 110Km, 132KV transmission line

connecting the hydro power plant to the TCN Kudenda substation in

Kaduna State

Typical Station Capacity Factor: ▪ 44%

Commentary

► Status

► North South Company Limited, was recently awarded the preferred bidder and is currently negotiating the Concession Agreement of the 30MW Gurara Hydroelectric Power Plant located in Kaduna State

► NSP will take over theoperations of the plantby the 4th Quarter of2019


Asset Overview

3. Shiroro Solar Power Project (Ongoing)

Details

Location: ▪ Shiroro Local Government Area, Niger State, Nigeria

Ownership: ▪ NSP

Status:

▪ Completed preliminary technical feasibility

▪ Completed bankable technical feasibility report

▪ Secured approval of transmission connection from Transmission

Company of Nigeria

▪ Secured approval of Environmental and Social Impact assessment

studies from the Federal Ministry of Environment

Average Solar Radiation: ▪ 5.42Kwh/m2/day

Proposed Installed Capacity: ▪ 300MW

Target Delivery Date/ Commencement of

Operation:▪ 2020

Evacuation: ▪ Similar routes to Shiroro Hydro

Commentary

► Status

► Completed preliminary technical feasibility

► Completed bankable technical feasibility report

► Secured approval of transmission connection from Transmission Company of Nigeria

► Secured approval of Environmental and Social Impact assessment studies from the Federal Ministry of Environment




Management Strategy and Outlook

Section Five


Strategic Funding Plan

► NSP intends to tap into the capital market to raise

long term funds to finance NSP’s proposed upgrade

and overhaul of its Unit 4 power generator from

150MW to 165MW capacity and refinance NSP’s

existing loan facilities/obligation.

► The process for the capital raise has commenced with

the proposed registration of NGN50 billion medium

term note programme under which the first series of

15yr instrument would be issued

Development of 300MW Solar Power Project

► Issuance of Generation License, project site, preevacuation and EIA certificate have all beenapproved and received

► Synergy between Solar and hydro will add value tothe grid

► Engagement of Tractebel Engineering consultantto carry out bankable feasibility studies

Strategic acquisition of assets

► Pan African aspirations commencing with Nigeria

► Developing capital structure to acquire NIPP

assets and other available opportunities inNigeria

Optimize and de-risk Shiroro Power Plant

► Overhaul of unit commencing with Unit 4 in 2018

► The overhauls will also include increasing therating of each turbine from 150MW to 165MW-180MW and increasing the efficiency so as to useless water

1

3

2

4

NSP’s Corporate Strategy and Outlook


450

600

1,460

30

100

700

3030

2013 2018 2019 2020 2022 2024

NSP’s Power Generating Capacity Trajectory

Commentary

► NSP envisages a promising future in the power sector in Africa and we will continue to make significant investments aimed at achieving its medium to long term strategic objectives

► NSP has a well defined strategy to ramp-up its power generating capacity by over c.200% to 1,490MW over the next six years

Generating Capacity Trajectory (MW)

NSP took over Shiroro with a structural failure on the intake gate of

generating unit 4. Effectively, Shiroro had an operating

capacity of 450MW

NSP embarked on an aggressive execution of Capacity recovery

programme which resulted in complete

overhaul of the 2 units that were partially overhauled before

takeover and fixing of the intake gate of Unit

4

NSP recently won the 25-year

concession of the 30MW Gurara

hydroelectric power plant located in

Kaduna State

Upon delivery of the ongoing Shiroro Solar

Power Plant, NSP’s power generation

capacity would rise to 730MW

NSP is keen on acquiring aPower Plant of about

700MW .Also a unit will be retrofitted

to increase its capacity from 150MW to 180MW

TODAY

A unit will be retrofitted bringing

NSP’s total estimated power

generation to 1,490 MW by 2024


Contact Details

Kolapo Joseph

General Manager, Corporate Finance and Corporate Development

+ 234 812 702 1000

[email protected]

Engr. Olubunmi Peters

Executive Vice Chairman/Chief Executive Officer

+ 234 803 302 2804

[email protected]

North South Power Company Limited

The Clan PlacePlot 1386A, Tigris CrescentMaitama, FCT Abuja Nigeria

www.northsouthpower.com

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