NIGERIA Establishment and Development of NPP … · Establishment and Development of the NPP Owner ... responsibility of the owner/operator of the nuclear power plant, ... Operator

Establishment and Development Establishment and Development Establishment and Development Establishment and Development of the NPP Owner/Operator of the NPP Owner/Operator of the NPP Owner/Operator of the NPP Owner/Operator

Organization in NigeriaOrganization in NigeriaOrganization in NigeriaOrganization in Nigeria

byF. Erepamo Osaisai

Chairman/Chief ExecutiveNigeria Atomic Energy Commission

Presentation at the Technical Meeting on Information Exchange Among

Experienced and Future Operators of NPPsOctober 16-18, 2012; Vienna, Austria.

October 18, 2012

Discussion OutlineDiscussion OutlineDiscussion OutlineDiscussion Outline

i. NAEC and the National Institutional Framework forNuclear Power Programme Implementation.

ii. Ownership, Funding and Financing of NPP.

iii. Proposed Structure of the Owner/OperatorOrganization

iv. Summing Up.

2FE Osaisai: Establishment and Development of NPP Owner/ Operator Organization: TM on Info Exchange; Vienna

October 18, 2012

INAEC and the National

Institutional Framework for NP Programme Implementation

3FE Osaisai: Establishment and Development of NPP Owner/ Operator Organization: TM on Info Exchange; Vienna

October 18, 2012

1.1 The Nigeria Atomic Energy Commission: Mandate and Functions

� The Nigeria Atomic Energy Commission (NAEC), created by Act 46 of 1976 (asamended by Cap N91 LFN, 2004), is the national focal agency charged with theresponsibility for the promotion of the development of atomic energy and for allmatters relating to the peaceful uses of atomic energy.

� As mandated by law, NAEC is charged with the principal responsibility ofdeveloping the framework and technical pathway to explore, exploit and harnessatomic energy for peaceful applications in all its ramifications for thesocioeconomic development of Nigeria in conformity with the policies of theFederal Government.

� Specifically, vested with the mandate to develop and implement the nationalprogrammes to deploy nuclear power plants for electricity generation in thecountry as follows:

� construct and maintain nuclear installations for the purpose of generatingelectricity;

� produce, use and dispose of atomic energy and carry out research intomatters connected with the peaceful uses of atomic energy;

� manufacture or otherwise produce, buy or otherwise acquire, treat, store,transport and dispose of any radioactive substances; etc

4FE Osaisai: Establishment and Development of NPP Owner/

Operator Organization: TM on Info Exchange; Vienna

October 18, 2012

1.2 Organizational Structure

� The NAEC Commission as reconstituted consists of a Chairman/Chief ExecutiveOfficer and six Members who function on a full-time basis.

� In order to enrich, strengthen and broaden the coordination base of the policy-forming organs of the Commission, in addition to the full-time members, thereare seven ex-officio members who serve as representatives of major sectoralstakeholders as provided for in the enabling act.

� A Technical Advisory Committee (TAC), which comprises of major stakeholderagencies and professional organizations and chaired by the Chairman/CEO,develops and streamlines the needed technical direction for theimplementation of the mandate of the Commission.

� A Nuclear Energy Programme Implementation Committee (NEPIC), whosecomposition consists of representatives of the relevant national stakeholderagencies and institutions under the leadership of the Chairman/CEO of NAEC,provides an effective interface for inter-agency collaboration in the planning andexecution of the various elements of the national nuclear power programme.

� Commission’s structure is aimed at optimizing the building of adequatetechnical capacity and competencies, and operational efficiency for theimplementation of its primary mandate. The structure consists of six majortechnical directorates and five service divisions/units under the Office of theChairman/Chief Executive Officer.



October 18, 2012 FE Osaisai: Establishment and Development of NPP Owner/ Operator Organization: TM on Info Exchange; Vienna

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Figure Figure Figure Figure 1.11.11.11.1::::

October 18, 2012

1.3 National Institutional Framework for NP Development

� The Nigeria Atomic Energy Commission (NAEC), mandated as national focalinstitution for atomic energy development in Nigeria;

� Six nuclear energy research centres operate under the supervision of NAEC;involved in manpower training and capacity building;

� The Nigerian Nuclear Regulatory Authority (NNRA) is the national nuclearregulator; established by Act 19 of 1995, became operational in 2001.Empowered to licence and regulate the operations of the nuclear powerindustry and the use of radioactive sources;

� The Energy Commission of Nigeria (ECN) responsible for energy policy andplanning; National Electricity Regulatory Commission (NERC) - electricitypricing; National Environmental Standards and Regulations EnforcementAgency (NESRA) – for environmental protection; and the National EmergencyManagement Agency (NEMA) – emergency planning and management;

� Harmonization of the input of the many relevant stakeholder institutions iscoordinated through the Nuclear Energy Programme ImplementationCommittee (NEPIC);

� Programme is also implemented with the requisite internationalendorsement, particularly the support of the IAEA and other partners,ensuring safety and security.




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FE Osaisai: Establishment and Development of NPP Owner/ Operator Organization: TM on Info Exchange;

Vienna


IIOwnership, Funding and

Financing of NPP.

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FE Osaisai: Establishment and Development of NPP Owner/ Operator Organization: TM on Info Exchange; Vienna

2 Ownership, Funding and Financing of NPP (1)

� One very challenging characteristic of Nuclear Power Development in anewcomer country, irrespective of ownership, is long-term national(political) commitment and sustainability of the programme over agestation period of at least 20 years;

� Overcoming this challenge requires that there should be a broad-basedacceptance of the programme by the citizenry;

� The funding and financing requirements for Nuclear Power Infrastructure(NPI) development over time, and building of nuclear power plants,respectively, are challenging;

� The term funding is used to refer to the initial fiscal responsibility ofgovernment in establishing the minimum NPI and is most often providedthrough national budgetary allocations;

� The Commitment of Government to fund the development of the requisiteNuclear Power Infrastructure (NPI).

� Government’s ability to successfully carry out these responsibilities wouldlargely determine the success of subsequent efforts to attractvendor/utility/private sector financing of the nuclear power plants (NPPs);


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2 Ownership, Funding and Financing of NPP (2)

� Financing refers to the fiscal responsibility of the owner/operator of the nuclearpower plant, be it the government, a public or private entity. This responsibilityincludes cost of the construction, operation and maintenance of the nuclearpower plant;

� Development of the requisite financing plan, catalyzed by government, with theprivate sector as a partner;

� Would it be financed through the national budget or sovereign credit?

� Could it be through some other innovative method such as BOO, BOOT..?

� Globally, traditional financing mechanisms which hitherto have been alien to NPdevelopment are emerging to be effective. These include BOO and BOOT(Russia-Turkey);

� Winning the confidence of the international financial/investing community in NPPdevelopment requires a stable business environment and continuingdetermination to create and competently manage a seamless national nuclearprogramme; and

� Reliance on short-term mechanisms to financing NPP development wont cut it,and the sustainability of the national programmes over time can only be assuredthrough proper and effective succession planning by developing a corps of youngnuclear industry professionals and leaders through training.


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iiiProposed Structure of the

Owner/Operator Organization

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3.1 Features of New NPP Operating Organizations

� Structure of NPP Owner Operating Organization will depend to a large extenton Government’s Policy on nuclear power generation;

� Can the government of new embarking country play any major role to ensurelong-term national (political) commitment and sustainability of the programmewithout being a major stakeholder (ownership);

� Post Fukushima Daiichi upgraded stringent requirements for nuclear safetyand security and adherence to new commitment to global frameworks fornational, regional and international emergency preparedness and responsecapabilities may necessitate some level of participation of government in NPPownership;

� Funding commitment and fiscal responsibility of government of embarkingcountry to NPI development would ordinarily translate into some form ofequity in NPP owner/operating organization;

� The Financing mechanism of the NPP construction and operation woulddetermine the ownership structure of the Owner/Operator Organization (directgovernment funding through national budget, sovereign credit, or creativefunding through BOO, BOOT, or another), which may be time- bound; and

� Role specification (definition) as part of contractual agreements –vendor/owner/operator/NP-utility.


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15October 18, 2012 FE Osaisai: Establishment and Development of NPP Owner/


3.2 Probable Ownership of NPP Organizations

� Most likely that NPP owner organization would be a Joint VentureCompany with part-ownership by Federal Government and a ForeignTechnical partner which would be a vendor/NPP utility;

� Expected that financing mechanism would be BOO(T) and the ForeignTechnical Partner would initially be a majority equity holder in the NPPcompany;

� Government representation in the company will include participation of theMinistries of Power, Trade & Investment, Mines & Steel Development, andFinance, as well as the Nigeria Atomic Energy Commission (NAEC), andthe Transmission Company of Nigeria (TCN);

� The core indigenous initial technical personnel for the organization willprincipally be sourced from the Nuclear Power Plant Development (NPPD)directorate of NAEC;

� Government’s facilitation and commitment to advance Power PurchaseAgreements may also affect the level of initial majority equity ownershipto be taken by Core Investor/Foreign Technical Partner; and

� Details of the actual structure would emerge during contractualnegotiations for the construction of the NPPs.


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ivivivivSumming UpSumming UpSumming UpSumming Up

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October 18, 2012

4 Summing Up

� The Federal Government has, by policy and legislation, starteddisengagement from direct involvement in electricity generation;

� Currently, all power generating stations hitherto owned by the nationalmonopoly, the National Electric Power Authority (NEPA), now, PowerHolding Company of Nigeria are being sold to private entities;

� Owing to the core features of NPP development and the concomitantneed for direct long-term government commitment to ensure successand sustainability, the Federal Government would take some equityownership in the emerging nuclear power company in the country;

� It is expected that a Foreign Technical Partner, which may be a powerreactor vendor/utility would take a majority shareholding and build theNPPs on a BOO(T) basis;

� Government would also facilitate and guarantee the development ofappropriate Power Purchase Agreements;

� Specific details of the ownership structure would emerge during thecontractual negotiations leading to construction of the NPPs.



October 18, 2012

Thank you for your attention.



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NIGERIA Establishment and Development of NPP … · Establishment and Development of the NPP Owner ... responsibility of the owner/operator of the nuclear power plant, ... Operator