Studies
Solar power. N/A N/A
Economic analysis of the power purchase price and of the 6 MWc PV solar power plant project to be connected to the national grid in Kandi (North of Benin)
| Country : | Benin . |
| Client : | AFD (French Development Agency) |
| Start Date : | May 2012 |
| Completion Date : | December 2012 |
| Value of services : | 29 700€ |
| Funder : | AFD (French Development Agency ) |
| Associate/Partner : | N/A |
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| Description : |
The French Development Agency (AFD) wishes to facilitate the emergence of the photovoltaic solar sector in Western Africa and is interested in financing a 6 MWc PV solar power plant project to be connected to the national grid in Kandi (North of Benin). The energy produced by the power plant will be sold to the national utility (SBEE), through a “take or pay” kind contract for a 25 year period. The financial model provides information on the kWh produced price. However, for the smooth running of the project and to justify a discount by AFD on the interest rate, it is necessary that this purchase price corresponds to a “right” price of solar electricity, and therefore remains bearable by the power purchaser (SBEE or Communauté Electrique du Bénin) over the contract period. This study aims at supplying an objective base of discussions to facilitate the later negotiations on the power purchase price. The objective of this assignment is to carry out a study that will provide SBEE (or CEB), investors and AFD with necessary information to i) determine the "right price" of sale of the electricity produced by the photovoltaic power plant of Kandi to be indicated in the Power Purchase Agreement (PPA) and ii) estimate the economic effects of the project to enable AFD to determine the discount level to be applied to the interest rate. |
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| Description of the Actual Services Provided | The services provided by IED were divided into three phases. Phase 1: determination of the "right price" of purchase of the electricity supplied by the solar power plant. Determination of a " right selling price", in statics as in dynamics, for a scenario of reference and some alternative scenarios considering various hypotheses on the evolution of hydrocarbons price and on the energy mix (according to long-term development plans of SBEE and CEB) Phase 2: determination of a bearable purchase price of the electricity (SBEE or Electric Community of Benin " CEB "), over the 25 year life time of the project, including a simplified financial analysis of the purchaser Income Statements Phase 3: costs-advantages economic analysis and distribution among actors of the economic income |