20160323 NERC Draft Mini-Grid Regulations 2016





NIGERIAN ELECTRICITY REGULATORY COMMISSION

REGULATIONS FOR MINI-GRIDS 2016

PREFACE

[NOTE to NERC: The Preface has only been included for introductory purposes during the consultative stages and as long as the regulation remains a draft.]

This Mini-Grid Regulation is specifically designed to accelerate electrification in areas without any existing distribution grid (“Unserved areas”) and areas with an existing but poorly electrified or non-functional distribution grid (“Underserved areas”), especially but not limited to rural areas. The Regulation shall promote the engagement of the private sector, communities, Non-Governmental Organisations and other stakeholders in achieving nationwide electrification, and it seeks to minimize major risks associated with Mini-Grid investments such as:

  1. Sudden tariff changes, as tariffs would have been agreed in advance by the relevant parties; and



  1. Stranded Mini-Grid Operator investments due to the connection of the main grid to Mini-Grid in circumstances where the main grid has been extended to cover the Mini-Grid area. In such cases, a fair compensation mechanism would be applied for Mini-Grid Operators that choose to exit.

The Regulation provides for permit and tariff approval procedures which will ease the administrative burden on the Mini-Grid Operator and ensure the process of obtaining the permit in a timely manner with minimal requirements from NERC. The Distributed Power of the Mini-Grid determines the regulatory procedure to be followed. For Distributed Power of up to 100kW, a permit is optional for the Mini-Grid Operator; while for Distributed Power of over 100kW and installed Generation Capacity of up to 1MW a permit, will be required. Beyond that limit, a full licence is required which is outside of the scope this regulation and is taken care of by other already existing regulations.

To encourage Mini-Grid development, cost reflective retail tariffs will be utilised. The tariffs are expected to be higher than the current Electricity Distribution Company (DisCo) retail tariffs. However, they will be lower than any electricity supply of the same quality generated from conventional sources in these areas.

This regulation is suitable for any business model or technology that Mini-Grid Operators may wish to implement.

The DisCos stand to benefit from Mini-Grid Operations and some of these benefits include:

  1. Development of the DisCos licensing areas which are not being exploited at no-cost to the DisCos pending when they are ready to extend their operations to such areas. At such time, demand would have increased to attractive levels for profitable operation, and customers will be used to paying for electricity and complying with the safety requirements.



  1. Opportunity of turning loss-making assets which have high maintenance and collection costs; and low yielding revenues in Underserved areas into profit making or at least non-loss-making assets by hiring out parts of their distribution network for a usage charge to the Mini-Grid Operators for its operations.



  1. Mini-Grids would be a bridge technology that can be used by DisCos to accelerate their electrification activities. The distribution infrastructure installed by the Mini-Grid Operator in systems requiring a permit will be compliant with national standards for easy connection to the main grid.

The following flow-chart (see next page) describes the core functions of this regulation.

REGULATION NO: XXXX

NIGERIAN ELECTRICITY REGULATORY COMMISSION

In exercise of the powers to make regulations conferred by Sections 96(1) and 70(8) of the Electric Power Sector Reform Act 2005 (Act No.6 of 2005) and all other powers enabling it, the Nigerian Electricity Regulatory Commission makes the following Regulations for Mini-Grids.



Arrangement of Sections



CHAPTER I

GENERAL

  1. Short Title

  2. Commencement

  3. Interpretation

  4. Application of the Regulations



CHAPTER II

CHARACTERISTICS OF MINI-GRIDS

  1. Structure/Arrangement

  2. Geographical Delineation of Distribution Systems


CHAPTER III

REGISTRATION; GRANT OF PERMIT AND MANDATORY CONDITIONS

  1. Isolated Mini-Grids larger than 100 kW of Distributed Power and up to 1 MW of power Generation Capacity

  2. Isolated Mini-Grids up to 100 kW of Distributed Power

  3. Interconnected Mini-Grids

  4. Application procedure for a Permit

  5. Obligations of the Mini-Grid Operator

  6. Accounts of the Mini-Grid Operator

  7. Inspection of accounts


CHAPTER IV

OPERATION OF THE MINI-GRID

  1. Installation and maintenance of the Mini-Grid

  2. Quality of Service

  3. Safety

  4. Environmental protection

  5. General Provision for Connection to Customers

  6. Interconnection of the Distribution Licencee’s Network to an Isolated Mini-Grid operated under a permit and Re-integration of an Interconnected Mini-Grid into the Distribution Licencee’s Network



CHAPTER V

COMMERCIAL ARRANGEMENT

  1. Determination of Tariffs and Other Charges

CHAPTER VI

MISCELLANEOUS

  1. Exclusivity Period and Site Reservation for Project Development Purposes

  2. Procedure for Securing Compliance with Permit or Tripartite Contract as applicable

  3. Proceedings before the Commission

  4. Complaint Procedure

  5. Dispute Resolution

  6. Amendment or repeal



List of Annexes



FORMS FOR COMMUNICATION WITH NERC

Annex 1: Agreement Form for an Exclusive Project Development Period at a Site

Annex 2: Registration form for Mini-Grids with a Distributed Power of up to 100 kW

Annex 3: Application Form for Mini-Grid Permit

Annex 4: Reporting Form



GUIDELINES

Annex 5: Application Proceedings for Permit

Annex 6: Health and Safety Guidelines (including Recommendations on Environmental Protection)

Annex 7: Technical Requirements for Registered Mini-Grid Operators

Annex 8: Recommendations for Calculation of Usage Charges by the Distribution Licencee in Interconnected Mini-Grids

Annex 9: Complaints Procedure Guidelines

Annex 10: Dispute Resolution Mechanism



CONTRACT TEMPLATES

Annex 11: Tripartite Contract between Interconnected Mini-Grid Operator, Distribution Licencee and Connected Community

Annex 12: Contract Template between Isolated Mini-Grid Operator and Community

Annex 13: Mini-Grid Customer Contract Template

Annex 14: Asset Handover Document and Compensation Confirmation Sheet



CALCULATION TOOLS

Annex 15: Tariff calculation tool based on the MYTO methodology

CHAPTER I

GENERAL





1. Short Title

These regulations may be cited as the Nigerian Electricity Regulatory Commission Mini-Grid Regulations, 2016.





2. Commencement

  1. These Regulations shall come into force on the date on which they are approved by a resolution of the Commission.



  1. These Regulations shall be signed by the Chairman of the Commission who shall also cause the seal of the Commission to be affixed thereon.





3. Interpretation



  1. In these regulations, unless the context otherwise requires:

Act” means the Electric Power Sector Reform Act, 2005;

Business Rules” mean the Nigerian Electricity Regulatory Commission (Business Rules of the Commission) Regulations, 2006 as amended;



Commission” means the Nigerian Electricity Regulatory Commission (NERC);



Community” means a group of people within the same geographic location organized under a local leadership structure or a legally recognised corporate entity and in both cases capable of entering into contracts and being capable of suing and being sued;


Connected Community” means Community connected to the distribution network of a Distribution Licencee;

Connection” means the electrical equipment and materials that allow the transfer of electricity between the distribution system and an electrical system that is not part of that network and includes any transformers, switchgear, switch or relay at the point of interconnection that are necessary for the transfer, but does not include the lines and switchgear at the connection that form part of the transmission or distribution system;


Connection Point” means an entry or an exit point on a distribution network;

Distributed Power” means the active electric power fed into a Distribution Network on average within any 15 minutes time interval of its operation period;

Distribution Code” means the code and guidelines for the Nigerian electricity distribution system, as approved from time to time by the Commission;



Distribution Licencee” or “DisCo” means a holder of a Distribution Licence who operates a Distribution Network that is connected to the transmission system operated by the system operation Licencee;

Distribution Network” means any connection of cables, service lines and overhead lines, electrical apparatus/equipment and having design voltage of 33kV and below used to transport electric power on a distribution system;



Feeder” means a low voltage or medium voltage line of a distribution network being capable of supplying or absorbing at least 30 kVA of electricity in compliance with the Distribution Code;



Generation” means the production of electricity to be fed into a distribution network or supplied to the consumer directly;



Generation Capacity” means the guaranteed active power that a generation plant can supply to a load or network at any point in time under the given environmental constraints (temperature, humidity, etc.) and a power factor of 0.8 (inductive) for at least one hour under the assumption that the plant is well maintained and fully functional;



Independent Electricity Distribution Network” or “IEDN” means a distribution network not directly connected to a transmission system operated by the system operator. For the specific purpose of these Regulations, the term IEDN shall exclude Mini-Grids;

Independent Electricity Distribution Network Operator” or “IEDNO” means an IEDN operator Licenced by the Commission;



Interconnected Mini-Grid” means a Mini-Grid which is connected to a Distribution Licencee’s network;



Isolated Mini-Grid” means a Mini-Grid which is not connected to any Distribution Licencee’s network;


Licence” means a Licence granted by the Commission under the Act;

Licencee” means any Person who holds a Licence issued by the Commission;



Metering Code” means the Nigerian Metering Code approved by the Commission for use in measuring the flow of energy within the transmission and distribution systems in the Nigerian Electricity Supply Industry;


Mini-Grid” means any electricity supply system with its own power Generation Capacity, supplying electricity to more than one customer and which can operate in isolation from or be connected to a Distribution Licencee’s network. Within these Regulations, the term Mini-Grid is used for any Isolated or Interconnected Mini-Grid generating between 0kW and 1MW of Generation Capacity;


Mini-Grid Developer” means any entity legally established under Nigerian law which has applied for Registration or a Permit by the Commission to operate an Isolated Mini-Grid or which is preparing a Tripartite Contract for an Interconnected Mini-Grid;


Mini-Grid Operator” means any entity who operates an Isolated Mini-Grid and is registered or holds a Permit or who operates an Interconnected Mini-Grid under a Tripartite Contract;


Mini-Grid Permit Holder” means a Mini-Grid Operator which holds a Permit issued by the Commission under this regulation;


NESIS Regulation” means the Nigerian Electricity Supply and Installation Standards Regulation 2015;


Mini-Grid Permit” means a permit granted by the Commission to an Isolated Mini-Grid Operator, who applied, for the construction, operation and/or maintenance and where applicable ownership of a Mini-Grid;



Person” includes an individual, a company, partnership or any association of individuals, whether incorporated or not;



Registered Mini-Grid Operator” means a Mini-Grid operator operating one or more system(s) of less than 100 kW of Distributed Power per site who has gone through a Mini-Grid Registration procedure with the Commission successfully.



Registration” means the submission to the Commission of a registration form as shown in Annex 2 by a Mini-Grid Operator for one or more system(s) of up to 100 kW of Distributed Power per site;



Technical Codes” means Grid Code, Distribution Code; Metering Code, Health & Safety Code, NESIS Regulation and other codes approved by the Commission for the technical regulation of the electricity supply industry in Nigeria;



Tripartite Contract” means the contract between an Interconnected Mini-Grid Operator, Distribution Licencee and Connected Community which shall be as agreed between the parties or as provided in the form of the contract template in Annex 11 and approved by the Commission;



Underserved Area” means an area within a Distribution Licencee’s Network with an existing but poorly supplied or non-functional distribution system;



Unserved Area” means an area within a Distribution Licencee’s Network without an existing distribution system otherwise called off-grid.


  1. Unless otherwise specified, in these regulations:



  1. Words importing any one gender includes the other gender and the singular includes the plural and vice versa;



  1. Words or expressions used in these Regulations but not defined shall have the same meanings respectively assigned to them in the Act;



  1. Any reference to a statute or statutory provision includes a reference to that provision as amended, re-enacted or replaced and any regulations or orders made under such provisions from time to time; and



  1. If the date on which an event is scheduled to occur by these Regulations is a day which is not a business day, then the event shall be deemed to occur on the next business day.





4. Application of the Regulations



  1. These regulations shall apply to all Mini-Grids with Generation Capacity of up to 1MW, the owners, operators and users of the Mini-Grids as well as all other private or public stakeholders such as the Distribution Licencees or any federal or state institution or agency as the case may be interacting with Mini-Grid owners, operators and users in Nigeria.



CHAPTER II

CHARACTERISTICS OF MINI-GRIDS





5. Structure/Arrangement



  1. A Mini-Grid may be any one of the following:

  1. Isolated Mini-Grid

  2. Interconnected Mini-Grid



  1. A Mini-Grid is required to have a generator in its network. The generator may be operated by the Mini-Grid Operator or a third party.



6. Geographical Delineation of Distribution Systems



  1. The Commission may on request of a Mini-Grid Developer grant a Permit to construct, own, operate and/or maintain an Isolated Mini-Grid in a designated Unserved Area.



  1. The Commission may on request of a Mini-Grid Developer approve the Tripartite Contract, as agreed with the respective Connected Community and Distribution Licencee, to construct, operate and/or maintain an Interconnected Mini-Grid in an Underserved Area within a geographic location.



  1. A Mini-Grid Developer applying for a Mini-Grid Permit shall submit to the Commission an accurate description of the proposed distribution and generation system, including geographical depiction.



  1. The geographical depiction shall be in the prescribed form as shown in Annex 3.



  1. In case of different Feeders being connected to the same generator, the Commission may define each Feeder a separate Mini-Grid or all feeders together as one Mini-Grid as long as the aggregate power generated and distributed through these feeders does not exceed 1 MW.




CHAPTER III

REGISTRATION; GRANT OF PERMIT AND MANDATORY CONDITIONS





7. Isolated Mini-Grids larger than 100 kW of Distributed Power and up to 1 MW of Generation Capacity



  1. For an Isolated Mini-Grid, the Commission may grant a Permit mentioned in S .6(1) above upon the fulfilment of the following conditions:



    1. an application has been received by the Commission for the intended area;



    1. confirmation of the Distribution Licencee’s expansion plans approved by the Commission through the Commission to ensure that the Mini-Grid activities will not interfere with the expansion plans into the designated Unserved Area;



    1. written consent of the Distribution Licencee of the intended area where the operational period of the Mini-Grid Developer will be within the five year expansion plan of the Distribution Licencee;



    1. the intended geographic location is an Unserved Area which has not been assigned to an IEDNO or any other Mini-Grid Developer;



    1. submission of the executed agreement between the Community and Mini-Grid Developer for approval by the Commission;



    1. the Isolated Mini-Grid Developer and Community are in agreement for the installation of the Mini-Grid;



    1. all necessary land for construction and installation of all assets has been acquired and all other necessary permits have been granted to the Mini-Grid Developer;



    1. the tariff is calculated based on the MYTO methodology and approved by the Commission; and



    1. execution of the Health and Safety confirmation form in Annex 6 and submit to the Commission.





8. Isolated Mini-Grids up to 100 kW of Distributed Power

  1. The Mini-Grid Developer of an Isolated Mini-Grid with a Distributed Power of up to 100kW may select one of the following options:



    1. An application for a Permit mentioned in S. 6(1) above following all procedures as described in S. 7(1) above with all rights and obligations of a Mini-Grid Permit Holder as described under this regulation;



    1. A registration using the form in Annex 2.





9. Interconnected Mini-Grids



  1. For an Interconnected Mini-Grid, the Connected Community, the Mini-Grid Developer and the Distribution Licencee have to sign a Tripartite Contract which becomes binding for all parties upon approval by the Commission. The Commission may approve the Tripartite Contract mentioned in S. 6(2) above upon the fulfilment of the following conditions:



    1. an application has been received by the Commission for the intended area;

    1. the proposed retail tariff is calculated using the MYTO methodology, agreed by the Mini-Grid Developer, the Distribution Licencee and Connected Community and approved by the Commission;



    1. the Mini-Grid Developer, the Distribution Licencee and the Connected Community have executed a Tripartite Contract using the template in Annex 11 and which shall contain at the minimum the information below:



      1. the usage right for the Distribution Licencee’s network infrastructure which shall become an Interconnected Mini-Grid;



      1. the construction and ownership right for additional infrastructure (if applicable);



      1. the tariff for electricity generated by the Mini-Grid and fed into the Distribution Licencee’s network (if applicable);



      1. the availability of stable nominal voltage and effective system protection at the Connection Point of the generator with the Licencee’s Distribution Network (if applicable);



      1. the tariff for the purchase of electricity from the Distribution Licencee’s network (as applicable); and



      1. the agreement of the Connected Community to purchase electricity from the Mini-Grid for the tariffs defined.



  1. Once an area has been identified either by a Connected Community or Mini-Grid Developer, and a notification is made to the Commission for the purpose of considering the development of an Interconnected Mini-Grid, a Mini-Grid Developer can submit a proposal to the Distribution Licencee.



10. Application procedure for a Permit



  1. A Permit shall not be granted unless the mandatory conditions provided in S. 7 above are fulfilled.



  1. The Commission shall issue a Permit pursuant to S. 7 or S. 8 above or approve a Tripartite Contract pursuant to S. 9 above to an applicant within a maximum period of 30 days from the date of receipt of complete documentation. Application proceedings related to S.7, S.8 and S.9 are described in Annex 5. Where Annex 5 deviates from the Regulation, the Regulation shall prevail.



  1. Pending when a response is received from the Commission, the Mini-Grid Developer of a Mini-Grid of up to 100kW of Distributed Power who has applied for a Permit can commence operations as a Registered Mini-Grid Operator.



  1. Notwithstanding S.10(3) above, the Registered Mini-Grid Operator who wants to operate as a Mini-Grid Permit Holder shall:



    1. be required to use the MYTO calculation methodology in determining its tariff;



    1. have the right to compensation as provided in S.19 (2) (b) only where a Permit has been granted by the Commission.





11. Obligations of the Mini-Grid Permit Holder



  1. The Mini-Grid Permit Holder shall construct, operate and/or maintain its Distribution Network in accordance with the relevant Technical Codes and Standards.

  1. The Mini-Grid Permit Holder shall comply with the Act, terms and conditions of the Permit, the Tripartite Contract, the Agreement with the Community, Customer Contract, the rules and regulations, as well as the decisions, orders and directions of the Commission as applicable.



  1. The Mini-Grid Permit Holder shall comply with all other regulations unless expressly excluded in this regulation, including the regulations specified by the Commission regarding utilisation of the distribution assets for a business other than distribution of electricity.



  1. The Mini-Grid Permit Holder shall grant the Commission and its duly authorized representatives access to any information that is relevant to fulfil the tasks assigned to the Commission under the Act and this regulation.



12. Accounts of the Mini-Grid Permit Holder



  1. The Mini-Grid Permit Holder shall –



  1. maintain separate accounting records for the Mini-Grid business, including the business of utilizing the assets of a Distribution Licencee’s Network, in such form and containing such particulars as may be specified by the Commission and in accordance with the Companies and Allied Matters Act, 2004 Cap. 20 LFN, or as may be amended from time to time;


  1. prepare from such records, accounting statements for each financial year comprising a profit and loss account and a balance sheet; and


  1. ensure that the accounting statements prepared in accordance with the foregoing sub-sections are duly certified by an auditor in respect of each financial year, stating whether in the opinion of the auditor, the statement has been properly prepared and giving a true and fair view of the revenue, costs, assets, liabilities and reserves reasonably attributable to the business to which the statement relates.





13. Inspection of accounts for the purpose of adjustment of tariffs and ascertaining depreciated value



  1. Any Person authorised by the Commission shall be entitled to inspect and verify the accounts of a Mini-Grid Permit Holder at any reasonable time and the Mini-Grid Operator shall be under obligation to render all necessary assistance, including provision of required documents to the Person so authorized to inspect the accounts.



  1. The Mini-Grid Permit Holder shall provide reports in the form prescribed in Annex 4 to the Commission at least once every two years in accordance with Annex 6; and



  1. Where the authorized person inspecting the accounts of the Mini-Grid Permit Holder proves that the actual costs incurred or the actual revenue earned by the Mini-Grid Permit Holder deviate from the costs and revenues stated during tariff definition with the Commission at the point of application for the Permit or approval of Tripartite Contract as applicable:



    1. the input parameters for tariff calculation using the MYTO methodology shall be adjusted to the actual values; and



    1. the tariffs as well as the calculation of the depreciated value may be adjusted and approved by the Commission accordingly.



  1. The new tariffs as adjusted in S. 13(2) above shall be applied within 30 days after approval by the Commission.



  1. A Mini-Grid Permit Holder may request an inspection of accounts with the Commission in order to update its tariffs and depreciated value.



  1. The Community may request an inspection of accounts of the Mini-Grid Permit Holder with the intention to trigger an adjustment of tariffs.



  1. In case of the Mini-Grid Permit Holder asking for an inspection of accounts with the Commission, the Mini-Grid Permit Holder shall pay a flat fee of 200 NGN per customer connected to its Mini-Grid to the Commission.



  1. In case of the Community asking for an inspection of accounts with the Commission, the Community shall pay a flat fee of 200 NGN per customer connected to the Mini-Grid operated under a Permit in their Community to the Commission.





CHAPTER IV

MINI-GRID OPERATION UNDER A PERMIT





14. Installation and maintenance of the Mini-Grid operated under a Permit



  1. The Mini-Grid Permit Holder shall design, construct, commission, operate and/or maintain and de-commission its Distribution Network and related facilities in compliance with the Technical Codes and Standards, terms and conditions of its Permit or Tripartite Contract as applicable and in accordance with any other standards of design, construction, and maintenance as may be prescribed by the Commission from time to time. Where there is any inconsistency between these Regulations and the Technical Codes and Standards, the provisions of the Technical Codes shall prevail.



  1. The Registered Mini-Grid Operator is not bound by the Technical Codes and Standards for design, construction, commissioning, operation and maintenance of its distribution systems, but may apply the minimum technical requirements as set out in Annex 7.



15. Quality of Service



  1. The Mini-Grid Permit Holder shall supply electricity according to the contract signed with the Community or Connected Community as proposed in Annexes 11 and 12 respectively.



  1. The Registered Mini-Grid Operator shall supply electricity in accordance with the agreement executed with the Community.





16. Safety



  1. All Mini-Grid Operators shall apply safety guidelines as described in Annex 6 for the design, construction, commissioning, operation and maintenance of their generation and distribution assets.



17. Environmental protection



  1. All Mini-Grid Operators shall comply with the existing environmental legislation.





18. General Provision for Connection to Customers



  1. The Mini-Grid Permit Holder shall enter into the standardized connection agreements as proposed in Annex 13 with every customer who accepts to connect to the Mini-Grid operated under a Permit.



  1. The Metering Code shall be mandatory for all Registered Mini-Grids and Isolated Mini-Grids operated under a Permit and Interconnected Mini-Grids operated under a Tripartite Agreement. The Commission may on request of the Mini-Grid Operator grant a derogation where it deems fit.



  1. The tariff and billing model of Mini-Grids operated under a Permit shall be described in the standardized contract between the Mini-Grid Operator and the customers in the Community as proposed in Annex 13.





19. Interconnection of the Distribution Licencee’s Network to an Isolated Mini-Grid operated under a Permit and Re-integration of Interconnected Mini-Grid into a Distribution Licencee’s Network



  1. Each Mini-Grid Permit Holder shall operate in the geographical area specified in its Permit or Tripartite Contract as applicable.



  1. Where a Distribution Licencee extends its network to an Isolated Mini-Grid operated under a Permit, two options are available to the Mini-Grid Permit Holder:



    1. Convert to an Interconnected Mini-Grid Operator; or



    1. Transfer all assets the Isolated Mini-Grid Operator does not want to remove from the Mini-Grid system to the Distribution Licencee in return for compensation. Where the Mini-Grid Permit Holder elects to take this transfer option, the compensation mechanics shall be as follows:



  1. where the Distribution Licencee extends its Distribution Network within the first 5 years of the commissioning of the Mini-Grid operated under a Permit (Initial Period), the Isolated Mini-Grid Operator shall receive a compensation from the Distribution Licensee before handover of assets equal to the remaining depreciated value of assets (including the construction and development cost) as defined during the tariff definition by the Commission plus the revenue the Mini-Grid Operator generated from the Mini-Grid, commencing 12 months prior to the date of connection of the Mini-Grid operated under a Permit to the Distribution Network and document the payment process in Annex 14 and submit the signed document to the Commission;



  1. where the Distribution Licencee extends its Distribution Network after the Initial Period, the Mini-Grid Permit Holder shall receive a compensation from the Distribution Licensee before handover of assets equal to the remaining depreciated value of the assets as defined during the tariff definition by the Commission plus the revenue the Mini-Grid Operator generated from the Mini-Grid commencing 12 months prior to the date of connection of the Mini-Grid to the Distribution Network and document the payment process in Annex 14 and submit the signed document to the Commission;



  1. where the system setup has been changed since the latest tariff definition by the Commission, the Mini-Grid Permit Holder shall initiate an inspection of accounts according to S. 13(3) above in order to determine the depreciated value of assets. Pending the outcome of the inspection, the Mini-Grid Permit Holder shall receive immediate compensation based on the latest tariff definition by the Commission. Upon receipt of the outcome of the account inspection, the Mini-Grid Permit Holder shall be paid the difference between the compensation paid and the compensation amount determined following the inspection.



  1. Pursuant to S. 19(2)(b)(ii) above, where the parties fail to agree to the terms of the compensation, the Commission shall act as an arbiter to determine the compensation to be paid.



  1. Notwithstanding S. 19(2)(b)(iii), costs and depreciation times fixed with the tariff approval apply. Costs for assets not covered in the tariff approval procedure shall not be refunded to the Mini-Grid Operator.



  1. The Mini-Grid Permit Holder is obliged to remove and recycle (if possible) or dispose the assets and equipment that are fully depreciated in an environmentally friendly manner in accordance with environmental legislation. The Mini-Grid Operator may follow the guidelines on environmental matters as set out in Annex 6.



  1. Where a Distribution Licencee extends its Distribution Network to a Mini-Grid of a Registered Mini-Grid Operator, on request of the Distribution Licensee, the Registered Mini-Grid Operator has to de-commission and remove all its assets and equipment within 2 months after the Distribution Licencee has started supplying electricity to the area. The Registered Mini-Grid Operator shall not be entitled to any refund or compensation.



  1. After the expiry of a Tripartite Contract of an Interconnected Mini-Grid, and where not renewed, a Distribution Licencee may re-integrate an Interconnected Mini-Grid into its network subject to:



    1. the written proof of endorsement by the Connected Community; and



    1. notification to the Commission.



  1. The refund procedure described in S. 19(2)(b) would apply in this instance unless otherwise agreed in the Tripartite Contract.



CHAPTER V

COMMERCIAL ARRANGEMENT





20. Determination of Tariffs and Other Charges



Licencee Distribution Network Usage Charges



  1. The Interconnected Mini-Grid Operator shall pay the Distribution Licencee a usage charge which shall be agreed upon between the Interconnected Mini-Grid Operator and the Distribution Licencee and approved by the Commission.



  1. Where the Interconnected Mini-Grid Operator and the Distribution Licencee are unable to agree on the usage charges, the methodology described in Annex 8 shall be applied as a guideline.



Retail Tariffs



  1. For Mini-Grid Permit Holders, retail tariffs and other charges are determined using the MYTO methodology included in Annex 15 and approved by the Commission subject to a limitation of



    1. distribution losses to a maximum of 10%



    1. non-technical losses to a maximum of 10%

  1. The Registered Mini-Grid Operator may decide to determine retail tariffs and other charges



  1. using the MYTO calculation tool in Annex 15; or



  1. by an agreement between the Mini-Grid Operator and the Community (being a minimum of electricity customers representing 60% of the electricity output of that same Community); subject to the Commission’s right in S.13, to intervene and adjust the tariff that has been agreed with the Community where the rate of return of the Mini-Grid Operator exceeds a usual non-recourse commercial debt interest rate in local currency and with adequate tenure for these kind of projects + 6%.



  1. The executed agreements in S. 20(3) above shall be submitted to the Commission for its records.



CHAPTER VI

MISCELLANEOUS





21. Exclusivity Period and Site Reservation for Project Development Purposes



  1. The procedure for acquiring/renewing an exclusivity agreement for project development purposes by an Isolated Mini-Grid Developer shall work as follows:



  1. A Community may grant an exclusive right to develop an Isolated Mini-Grid project until commissioning at a certain site. The Community may grant to the Mini-Grid Developer an exclusivity period of up to 12 months as shown in Annex 1A.



  1. If required, the Isolated Mini-Grid Operator may request the Commission an extension beyond 12 months upon justification as shown in Annex 1A.



  1. The Distribution Licencee and the Community may grant an exclusive right to develop an Interconnected Mini-Grid project until commissioning at a certain site as shown in Annex 1B.



  1. The Community and the Commission or the Distribution Licencee may ask the developer to provide any proof of its commitment (e.g. Letter of Intent (“LOI”) from investor, endorsement letter from the State Government) before signing the exclusivity agreement.



  1. The Commission shall not grant a Permit or Licence or approve a Tripartite Contract as applicable to a Mini-Grid Developer for a certain site, where an exclusivity agreement has been executed in respect of that site.



  1. The Commission shall not grant an extension of an Exclusivity Period beyond 12 months where the site is within the 5 year extension plan of a Distribution Licencee. The Mini-Grid Developer is recommended to consult the Commission or the Distribution Licencee before signing the initial exclusivity agreement with the community.



  1. Notwithstanding the right granted in S. 21(1)(a), the Distribution Licencee reserves the right to integrate the Community to its distribution network.





22. Procedure for Securing Compliance with the Permit or Tripartite Contract as applicable

  1. Where the Commission, on the basis of material evidence in its possession is satisfied that the Mini-Grid Operator is contravening, or is likely to contravene, the terms and conditions of the Permit or Tripartite Contract as applicable, it shall serve an order to the Mini-Grid Operator to do, or not to do, such things as are specified in the order for the purpose of rectifying or avoiding any contravention or threatened contravention of any term or condition of the Permit or Tripartite Contract as applicable.



  1. The order shall specify the period within which the Mini-Grid Operator shall rectify or avoid the contravention or threatened contravention of any term or condition of the Permit or Tripartite Contract as applicable.



  1. Upon expiry of the period specified in the order, if no compliance is achieved, the Commission shall proceed to enforce the order through the enforcement mechanism established by it.



23. Proceedings before the Commission



  1. All proceedings before the Commission under these regulations shall be governed by the Business Rules of the Commission as may be amended from time to time.



24. Complaints Procedure



  1. Unless otherwise stated in this regulation, all customer complaints shall be resolved in accordance with the Complaints Procedure Guidelines in Annex 9.





25. Dispute Resolution



  1. Disputes between parties in connection with this regulation shall be resolved in line with the Dispute Resolution Mechanism in Annex 10.



26. Amendment or repeal


  1. The Commission may amend or repeal, in whole or in part, the provisions of these Regulations.





SIGNED BY THE ORDER OF THE COMMISSION





Figure 1: Isolated or Interconnected Mini-Grid

Figure 2: Isolated Mini-Grid

Figure 3: Interconnected Mini-Grid




















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20170819 - Final NERC Mini-Grid Regulations SB

NIGERIAN ELECTRICITY REGULATORY COMMISSION REGULATION FOR MINI-GRIDS 2016


REGULATION NO: NER/-R-110/17

NIGERIAN ELECTRICITY REGULATORY COMMISSION

In exercise of the powers to make regulations conferred by Sections 96(1) and 70(8) of the Electric Power Sector Reform Act 2005 (Act No.6 of 2005) and all other powers enabling it, the Nigerian Electricity Regulatory Commission makes the following regulation for Mini-Grids.

Arrangement of Sections

CHAPTER I

GENERAL

  1. Short Title

  2. Commencement

  3. Interpretation

  4. Application of the Regulation

CHAPTER II

CHARACTERISTICS OF MINI-GRIDS

  1. Structure/Arrangement

  2. Geographical Delineation of Distribution Systems

CHAPTER III

REGISTRATION; GRANT OF PERMIT AND MANDATORY CONDITIONS

  1. Isolated Mini-Grids larger than 100 kW of Distributed Power and up to 1 MW of power Generation Capacity

  2. Isolated Mini-Grids up to 100 kW of Distributed Power

  3. Interconnected Mini-Grids

  4. Application procedure for a Permit

  5. Obligations of the Mini-Grid Operator

  6. Accounts of the Mini-Grid Operator

  7. Inspection of accounts

CHAPTER IV

OPERATION OF THE MINI-GRID

  1. Installation and maintenance of the Mini-Grid

  2. Quality of Service

  3. Safety

  4. Environmental protection

  5. General Provision for Connection to Customers


  1. Interconnection of the Distribution Licensee’s Network to an Isolated Mini-Grid operated under a permit and Re-integration of an Interconnected Mini-Grid into the Distribution Licensee’s Network

CHAPTER V

COMMERCIAL ARRANGEMENT

  1. Determination of Tariffs and Other Charges

CHAPTER VI

MISCELLANEOUS

  1. Exclusivity Period and Site Reservation for Project Development Purposes

  2. Procedure for Securing Compliance with Permit or Tripartite Contract as applicable

  3. Proceedings before the Commission

  4. Complaint Procedure

  5. Dispute Resolution

  6. Amendment or repeal

LIST OF ANNEXES

FORMS FOR COMMUNICATION WITH NERC

Annex 1: Agreement Form for an Exclusive Project Development Period at a Site

Annex 2: Registration form for Mini-Grids with a Distributed Power of up to 100 kW

Annex 3: Application Form for Mini-Grid Permit

Annex 4: Reporting Form

GUIDELINES

Annex 5: Application Proceedings for Permit

Annex 6: Health and Safety Guidelines (including Recommendations on Environmental

Protection)

Annex 7: Technical Requirements for Registered Mini-Grid Operators

Annex 8: Recommendations for Calculation of Usage Charges by the Distribution Licensee in

Interconnected Mini-Grids

Annex 9: Complaints Procedure Guidelines

Annex 10: Dispute Resolution Mechanism

CONTRACT TEMPLATES

Annex 11: Tripartite Contract between Interconnected Mini-Grid Operator, Distribution

Licensee and Connected Community

Annex 12: Contract Template between Isolated Mini-Grid Operator and Community

Annex 13: Mini-Grid Customer Contract Template

Annex 14: Asset Handover Document and Compensation Confirmation Sheet


CALCULATION TOOLS

Annex 15: Tariff calculation tool based on the MYTO methodology




CHAPTER I

GENERAL

1. Short Title

This Regulation may be cited as the Nigerian Electricity Regulatory Commission Mini‑

Grid Regulation, 2016.

2. Commencement

  1. This Regulation shall come into force on the date on which it is approved by a resolution of the Commission.

  2. This Regulation shall be signed by the Chairman of the Commission who shall also cause the seal of the Commission to be affixed thereon.

3. Interpretation

(1) In this regulation, unless the context otherwise requires: “Act” means the Electric Power Sector Reform Act, 2005;

Business Rules” mean the Nigerian Electricity Regulatory Commission (Business Rules of the Commission) Regulations, 2006 as amended;

Commission” means the Nigerian Electricity Regulatory Commission (NERC);

Community” means a group of people within the same geographic location organized under a local leadership structure or a legally recognised corporate entity and in both cases capable of entering into contracts and being capable of suing and being sued;

Connected Community” means Community connected to the distribution network of a Distribution Licensee;

Connection” means the electrical equipment and materials that allow the transfer of electricity between the distribution system and an electrical system that is not part of that network and includes any transformers, switchgear, switch or relay at the point of interconnection that are necessary for the transfer, but does not include the lines and switchgear at the connection that form part of the transmission or distribution system;

Connection Point” means an entry or an exit point on a distribution network;

Distributed Power” means the active electric power fed into a Distribution Network on average within any 15 minutes time interval of its operation period;

Distribution Code” means the code and guidelines for the Nigerian electricity distribution system, as approved from time to time by the Commission;

Distribution Licensee” or “DisCo” means a holder of a Distribution Licence who operates a Distribution Network that is connected to the transmission system operated by the system operation Licensee;

Distribution Network” means any connection of cables, service lines and overhead lines, electrical apparatus/equipment and having design voltage of 33kV and below used to transport electric power on a distribution system;

Feeder” means a low voltage or medium voltage line of a distribution network being capable of supplying or absorbing at least 30 kVA of electricity in compliance with the Distribution Code;

Generation” means the production of electricity to be fed into a distribution network or supplied to the consumer directly;

Generation Capacity” means the guaranteed active power that a generation plant can supply to a load or network at any point in time under the given environmental constraints (temperature, humidity, etc.) and a power factor of 0.8 (inductive) for at least one hour under the assumption that the plant is well maintained and fully functional;

Independent Electricity Distribution Network” or “IEDN” means a distribution network not directly connected to a transmission system operated by the system operator. For the specific purpose of this Regulation, the term IEDN shall exclude Mini-Grids;

Independent Electricity Distribution Network Operator” or “IEDNO” means an IEDN operator Licensed by the Commission;

Interconnected Mini-Grid” means a Mini-Grid which is connected to a Distribution Licensee’s network;

Isolated Mini-Grid” means a Mini-Grid which is not connected to any Distribution Licensee’s network;

Letter of Intent (“LoI”)” means

Licence” means a Licence granted by the Commission under the Act;

Licensee” means any Person who holds a Licence issued by the Commission;

Metering Code” means the Nigerian Metering Code approved by the Commission for use in measuring the flow of energy within the transmission and distribution systems in the Nigerian Electricity Supply Industry;

Mini-Grid” means any electricity supply system with its own power Generation Capacity, supplying electricity to more than one customer and which can operate in isolation from or be connected to a Distribution Licensee’s network. Within this Regulation, the term Mini-Grid is used for any Isolated or Interconnected Mini-Grid generating between 0kW and 1MW of Generation Capacity;

Mini-Grid Developer” means any entity legally established under Nigerian law which has applied for Registration or a Permit by the Commission to operate an Isolated Mini-Grid or which is preparing a Tripartite Contract for an Interconnected Mini-Grid;

Mini-Grid Operator” means any entity who operates an Isolated Mini-Grid and is registered or holds a Permit or who operates an Interconnected Mini-Grid under a Tripartite Contract;

Mini-Grid Permit Holder” means a Mini-Grid Operator which holds a Permit issued by the Commission under this regulation;

NESIS Regulation” means the Nigerian Electricity Supply and Installation Standards Regulation 2015;

Mini-Grid Permit” means a permit granted by the Commission to an Isolated Mini-Grid Operator, who applied, for the construction, operation and/or maintenance and where applicable ownership of a Mini-Grid;

Person” includes an individual, a company, partnership or any association of individuals, whether incorporated or not;

Registered Mini-Grid Operator” means a Mini-Grid operator operating one or more system(s) of less than 100 kW of Distributed Power per site who has gone through a Mini-Grid Registration procedure with the Commission successfully.

Registration” means the submission to the Commission of a registration form as shown in Annex 2 by a Mini-Grid Operator for one or more system(s) of up to 100 kW of Distributed Power per site;

Technical Codes” means Grid Code, Distribution Code; Metering Code, Health & Safety Code, NESIS Regulation and other codes approved by the Commission for the technical regulation of the electricity supply industry in Nigeria;

Tripartite Contract” means the contract between an Interconnected Mini-Grid Operator, Distribution Licensee and Connected Community which shall be as agreed between the parties or as provided in the form of the contract template in Annex 11 and approved by the Commission;

Underserved Area” means an area within a Distribution Licensee’s Network with an existing but poorly supplied or non-functional distribution system;

Unserved Area” means an area within a Distribution Licensee’s Network without an existing distribution system otherwise called off-grid.

(2) Unless otherwise specified, in this regulation:

  1. Words importing any one gender includes the other gender and the singular includes the plural and vice versa;

  2. Words or expressions used in this regulation but not defined shall have the same meanings respectively assigned to them in the Act;

  3. Any reference to a statute or statutory provision includes a reference to that provision as amended, re-enacted or replaced and any regulations or orders made under such provisions from time to time; and

  4. If the date on which an event is scheduled to occur by this regulation is a day which is not a business day, then the event shall be deemed to occur on the next business day.

4. Application of the Regulation

(1) This Regulation shall apply to all Mini-Grids with Generation Capacity of up to 1MW, the owners, operators and users of the Mini-Grids as well as all other private or public stakeholders such as the Distribution Licensees or any federal or state institution or agency as the case may be interacting with Mini-Grid owners, operators and users in Nigeria.

CHAPTER II

CHARACTERISTICS OF MINI-GRIDS

5. Structure/Arrangement

  1. A Mini-Grid may be any one of the following:

  1. Isolated Mini-Grid

  2. Interconnected Mini-Grid

  1. A Mini-Grid is required to have a generator in its network. The generator may be operated by the Mini-Grid Operator or a third party.

6. Geographical Delineation of Distribution Systems

  1. The Commission may on request of a Mini-Grid Developer grant a Permit to construct, own, operate and/or maintain an Isolated Mini-Grid in a designated Unserved Area.

  2. The Commission may on request of a Mini-Grid Developer approve the Tripartite Contract, as agreed with the respective Connected Community and Distribution Licensee, to construct, operate and/or maintain an Interconnected Mini-Grid in an Underserved Area within a geographic location.

  3. A Mini-Grid Developer applying for a Mini-Grid Permit shall submit to the Commission an accurate description of the proposed distribution and generation system, including geographical depiction.

  4. The geographical depiction shall be in the prescribed form as shown in Annex 3.

  5. In case of different Feeders being connected to the same generator, the Commission may define each Feeder a separate Mini-Grid or all feeders together as one Mini-Grid as long as the aggregate power generated and distributed through these feeders does not exceed 1 MW.



CHAPTER III

REGISTRATION; GRANT OF PERMIT AND MANDATORY CONDITIONS

7. Isolated Mini-Grids larger than 100 kW of Distributed Power and up to 1 MW of Generation Capacity

(1) For an Isolated Mini-Grid, the Commission may grant a Permit mentioned in S .6(1) above upon the fulfillment of the following conditions:

  1. an application has been received by the Commission for the intended area;

  2. confirmation that based on the Distribution Licensee’s expansion plans approved by the Commission the Mini-Grid activities will not interfere with the expansion plans into the designated Unserved Area;

  3. written consent of the Distribution Licensee of the intended area where the proposed operational area of the Mini-Grid Developer will be within the five year expansion plan of the Distribution Licensee;

  4. the intended geographic location is an Unserved Area which has not been assigned to an IEDNO or any other Mini-Grid Developer;

  5. submission of the executed agreement between the Community and Mini-Grid Developer for approval by the Commission;

  6. all necessary land for construction and installation of all assets has been acquired or leased and all other necessary permits have been granted to the Mini-Grid Developer;

  7. the tariff is calculated based on the MYTO methodology and approved by the Commission; and

  8. execution of the Health and Safety confirmation form in Annex 6 and submit to the Commission.

8. Isolated Mini-Grids up to 100 kW of Distributed Power

(1) The Mini-Grid Developer of an Isolated Mini-Grid with a Distributed Power of up to 100kW may select one of the following options:

  1. Apply for a Permit mentioned in S. 6(1) above following all procedures as described in S. 7(1) above with all rights and obligations of a Mini-Grid Permit Holder as described under this regulation;

  1. A registration using the form in Annex 2.

9. Interconnected Mini-Grids

(1) For an Interconnected Mini-Grid, the Connected Community, the Mini-Grid Developer and the Distribution Licensee have to sign a Tripartite Contract which becomes binding for all parties upon approval by the Commission. The Commission may approve the Tripartite Contract mentioned in S. 6(2) above upon the fulfilment of the following conditions:

  1. an application has been received by the Commission for the intended area;

  2. the proposed retail tariff is calculated using the MYTO methodology, agreed by the Mini-Grid Developer, the Distribution Licensee and Connected Community and approved by the Commission;

  3. the Mini-Grid Developer, the Distribution Licensee and the Connected Community have executed a Tripartite Contract using the template in Annex 11 and which shall contain at the minimum the information below:

  1. the usage right for the Distribution Licensee’s network infrastructure which shall become an Interconnected Mini-Grid;

  2. the construction and ownership right for additional infrastructure (if applicable);

  3. the tariff for electricity generated by the Mini-Grid and fed into the Distribution Licensee’s network (if applicable);

  4. the availability of stable nominal voltage and effective system protection at the Connection Point of the generator with the Licensee’s Distribution Network (if applicable);

  5. the tariff for the purchase of electricity from the Distribution Licensee’s network (as applicable); and

  6. the agreement of the Connected Community to purchase electricity from the Mini-Grid for the tariffs defined.

(2) Once an area has been identified either by a Connected Community or Mini-Grid Developer, and a notification is made to the Commission for the purpose of considering the development of an Interconnected Mini-Grid, a Mini-Grid Developer can submit a proposal to the Distribution Licensee.

10. Application procedure for a Permit

  1. A Permit shall not be granted unless the mandatory conditions provided in S. 7 above are fulfilled.

  2. The Commission shall issue a Permit pursuant to S. 7 or S. 8 above or approve a Tripartite Contract pursuant to S. 9 above to an applicant within a maximum period of 30 days from the date of receipt of complete documentation. Application proceedings related to S.7, S.8 and S.9 are described in Annex 5. Where Annex 5 deviates from the Regulation, the Regulation shall prevail.

  3. Pending when a response is received from the Commission, the Mini-Grid Developer of a Mini-Grid of up to 100kW of Distributed Power who has applied for a Permit can commence operations as a Registered Mini-Grid Operator.

  4. Notwithstanding S.10(3) above, the Registered Mini-Grid Operator who wants to operate as a Mini-Grid Permit Holder shall:

  1. be required to use the MYTO calculation methodology in determining its tariff;

  2. have the right to compensation as provided in S.19 (2) (b) only where a Permit has been granted by the Commission.

11. Obligations of the Mini-Grid Permit Holder

  1. The Mini-Grid Permit Holder shall construct, operate and/or maintain its Distribution Network in accordance with the relevant Technical Codes and Standards.

  2. The Mini-Grid Permit Holder shall comply with the Act, terms and conditions of the Permit, the Tripartite Contract, the Agreement with the Community, Customer Contract, the rules and regulations, as well as the decisions, orders and directions of the Commission as applicable.

  1. The Mini-Grid Permit Holder shall comply with all other regulations unless expressly excluded in this regulation, including the regulations specified by the Commission regarding utilisation of the distribution assets for a business other than distribution of electricity.

  2. The Mini-Grid Permit Holder shall grant the Commission and its duly authorized representatives access to any information that is relevant to fulfill the tasks assigned to the Commission under the Act and this regulation.

12. Accounts of the Mini-Grid Permit Holder

(1) The Mini-Grid Permit Holder shall –

  1. maintain separate accounting records for the Mini-Grid business, including the business of utilizing the assets of a Distribution Licensee’s Network, in such form and containing such particulars as may be specified by the Commission and in accordance with the Companies and Allied Matters Act, 2004 Cap. 20 LFN, or as may be amended from time to time;

  2. prepare from such records, accounting statements for each financial year comprising a profit and loss account and a balance sheet; and

  3. ensure that the accounting statements prepared in accordance with the foregoing sub-sections are duly certified by an independent auditor in respect of each financial year, stating whether in the opinion of the auditor, the statement has been properly prepared and giving a true and fair view of the revenue, costs, assets, liabilities and reserves reasonably attributable to the business to which the statement relates.

13. Inspection of accounts for the purpose of adjustment of tariffs and ascertaining depreciated value

  1. Any Person authorised by the Commission shall be entitled to inspect and verify the accounts of a Mini-Grid Permit Holder at any reasonable time and the Mini-Grid Operator shall be under obligation to render all necessary assistance, including provision of required documents to the Person so authorized to inspect the accounts.

  2. The Mini-Grid Permit Holder shall provide reports in the form prescribed in Annex 4 to the Commission at least once every two years in accordance with Annex 6; and

(3) Where the authorized person inspecting the accounts of the Mini-Grid Permit Holder proves that the actual costs incurred or the actual revenue earned by the Mini-Grid Permit Holder deviate from the costs and revenues stated during tariff definition with the Commission at the point of application for the Permit or approval of Tripartite Contract as applicable:

  1. the input parameters for tariff calculation using the MYTO methodology shall be adjusted to the actual values; and

  2. the tariffs as well as the calculation of the depreciated value may be adjusted and approved by the Commission accordingly.

(4) The new tariffs as adjusted in S. 13(2) above shall be applied within 30 days after approval by the Commission.

(5) A Mini-Grid Permit Holder may request an inspection of accounts with the Commission in order to update its tariffs and depreciated value.

(6) The Community may request an inspection of accounts of the Mini-Grid Permit Holder with the intention to trigger an adjustment of tariffs.

(7) In case of the Mini-Grid Permit Holder asking for an inspection of accounts with the Commission, the Mini-Grid Permit Holder shall pay a flat fee of 200 NGN per customer connected to its Mini-Grid to the Commission.

(8) In case of the Community asking for an inspection of accounts with the Commission, the Community shall pay a flat fee of 200 NGN per customer connected to the Mini-Grid operated under a Permit in their Community to the Commission.



CHAPTER IV

MINI-GRID OPERATION UNDER A PERMIT

14. Installation and maintenance of the Mini-Grid operated under a Permit

(1) The Mini-Grid Permit Holder shall design, construct, commission, operate and/or maintain and de-commission its Distribution Network and related facilities in compliance with the Technical Codes and Standards, terms and conditions of its Permit or Tripartite Contract as applicable and in accordance with any other standards of design, construction, and maintenance as may be prescribed by the Commission from

time to time. Where there is any inconsistency between this regulation and the Technical Codes and Standards, the provisions of the Technical Codes shall prevail.

(2) The Registered Mini-Grid Operator is not bound by the Technical Codes and Standards for design, construction, commissioning, operation and maintenance of its distribution systems, but may apply the minimum technical requirements as set out in Annex 7.

15. Quality of Service

  1. The Mini-Grid Permit Holder shall supply electricity according to the contract signed with the Community or Connected Community as proposed in Annexes 11 and 12 respectively.

  2. The Registered Mini-Grid Operator shall supply electricity in accordance with the agreement executed with the Community.

16. Safety

(1) All Mini-Grid Operators shall apply safety guidelines as described in Annex 6 for the design, construction, commissioning, operation and maintenance of their generation and distribution assets.

17. Environmental protection

(1) All Mini-Grid Operators shall comply with the existing environmental legislation.

18. General Provision for Connection to Customers

  1. The Mini-Grid Permit Holder shall enter into the standardized connection agreements as proposed in Annex 13 with every customer who accepts to connect to the Mini-Grid operated under a Permit.

  2. The Metering Code shall be mandatory for all Registered Mini-Grids and Isolated Mini-Grids operated under a Permit and Interconnected Mini-Grids operated under a Tripartite Agreement. The Commission may on request of the Mini-Grid Operator grant a derogation where it deems fit.

(3) The tariff and billing model of Mini-Grids operated under a Permit shall be described in the standardized contract between the Mini-Grid Operator and the customers in the Community as proposed in Annex 13.

19. Interconnection of the Distribution Licensee’s Network to an Isolated Mini-Grid operated under a Permit and Re-integration of Interconnected Mini-Grid into a Distribution Licensee’s Network

(1) Each Mini-Grid Permit Holder shall operate in the geographical area specified in its Permit or Tripartite Contract as applicable.

(2) Where a Distribution Licensee extends its network to an Isolated Mini-Grid operated under a Permit, two options are available to the Mini-Grid Permit Holder:

  1. Convert to an Interconnected Mini-Grid Operator; or

  1. Transfer all assets the Isolated Mini-Grid Operator does not want to remove from the Mini-Grid system to the Distribution Licensee in return for compensation. Where the Mini-Grid Permit Holder elects to take this transfer option, the compensation mechanics shall be as follows:

  1. where the Distribution Licensee extends its Distribution Network within the first 5 years of the commissioning of the Mini-Grid operated under a Permit (Initial Period), the Isolated Mini-Grid Operator shall receive a compensation from the Distribution Licensee before handover of assets equal to the remaining depreciated value of assets (including the construction and development cost) as defined during the tariff definition by the Commission plus the revenue the Mini-Grid Operator generated from the Mini-Grid, commencing 12 months prior to the date of connection of the Mini-Grid operated under a Permit to the Distribution Network and document the payment process in Annex 14 and submit the signed document to the Commission;

  2. where the Distribution Licensee extends its Distribution Network after the Initial Period, the Mini-Grid Permit Holder shall receive a compensation from the Distribution Licensee before handover of assets equal to the remaining depreciated value of the assets as defined during the tariff definition by the Commission plus the revenue the Mini-Grid Operator generated from the Mini-Grid commencing 12 months prior to the date of connection of the Mini‑Grid to the Distribution Network and document the payment process in Annex 14 and submit the signed document to the Commission;

(iii) where the system setup has been changed since the latest tariff definition by the Commission, the Mini-Grid Permit Holder shall initiate an inspection of accounts according to S. 13(3) above in order to determine the depreciated value of assets. Pending the outcome of the inspection, the Mini-Grid Permit Holder shall receive immediate compensation based on the latest tariff definition by the Commission. Upon receipt of the outcome of the account inspection, the Mini-Grid Permit Holder shall be paid the difference between the compensation paid and the compensation amount determined following the inspection.

  1. Pursuant to S. 19(2)(b)(ii) above, where the parties fail to agree to the terms of the compensation, the Commission shall act as an arbiter to determine the compensation to be paid.

  1. Notwithstanding S. 19(2)(b)(iii), costs and depreciation times fixed with the tariff approval apply. Costs for assets not covered in the tariff approval procedure shall not be refunded to the Mini-Grid Operator.

  2. The Mini-Grid Permit Holder is obliged to remove and recycle (if possible) or dispose the assets and equipment that are fully depreciated in an environmentally friendly manner in accordance with environmental legislation. The Mini-Grid Operator may follow the guidelines on environmental matters as set out in Annex 6.

  3. Where a Distribution Licensee extends its Distribution Network to a Mini-Grid of a Registered Mini-Grid Operator, on request of the Distribution Licensee, the Registered Mini-Grid Operator has to de-commission and remove all its assets and equipment within 2 months after the Distribution Licensee has started supplying electricity to the area. The Registered Mini-Grid Operator shall not be entitled to any refund or compensation.

  4. After the expiry of a Tripartite Contract of an Interconnected Mini-Grid, and where not renewed, a Distribution Licensee may re-integrate an Interconnected Mini-Grid into its network subject to:

  1. the written proof of endorsement by the Connected Community; and

  2. notification to the Commission.

(8) The refund procedure described in S. 19(2)(b) would apply in this instance unless otherwise agreed in the Tripartite Contract.

CHAPTER V

COMMERCIAL ARRANGEMENT

20. Determination of Tariffs and Other Charges

Licensee Distribution Network Usage Charges

(1) The Interconnected Mini-Grid Operator shall pay the Distribution Licensee a usage charge which shall be agreed upon between the Interconnected Mini-Grid Operator and the Distribution Licensee and approved by the Commission.

(2) Where the Interconnected Mini-Grid Operator and the Distribution Licensee are unable to agree on the usage charges, the methodology described in Annex 8 shall be applied as a guideline.

Retail Tariffs

(3) For Mini-Grid Permit Holders, retail tariffs and other charges are determined using the MYTO methodology included in Annex 15 and approved by the Commission subject to a limitation of

  1. Technical losses to a maximum of 10%

  2. Non-technical losses to a maximum of 10%

(4) The Registered Mini-Grid Operator may decide to determine retail tariffs and other charges

  1. using the MYTO calculation tool in Annex 15; or

  2. by an agreement between the Mini-Grid Operator and the Community (being a minimum of electricity customers representing 60% of the electricity output of that same Community); subject to the Commission’s right in S.13, to intervene and adjust the tariff that has been agreed with the Community where the rate of return of the Mini-Grid Operator exceeds a usual non-recourse commercial debt interest rate in local currency and with adequate tenure for these kind of projects + 6%.

  3. The executed agreements in S. 20(3) above shall be submitted to the Commission for its records.

CHAPTER VI

MISCELLANEOUS

21. Exclusivity Period and Site Reservation for Project Development Purposes

(1) The procedure for acquiring/renewing an exclusivity agreement for project development purposes by an Isolated Mini-Grid Developer shall work as follows:

  1. A Community may grant an exclusive right to develop an Isolated Mini-Grid project until commissioning at a certain site. The Community may grant to the Mini-Grid Developer an exclusivity period of up to 12 months as shown in Annex 1A.

  2. If required, the Isolated Mini-Grid Operator may request the Commission an extension beyond 12 months upon justification as shown in Annex 1A.

  3. The Distribution Licensee and the Community may grant an exclusive right to develop an Interconnected Mini-Grid project until commissioning at a certain site as shown in Annex 1B.

(2) The Community and the Commission or the Distribution Licensee may ask the developer to provide any proof of its commitment (e.g. Letter of Intent (“LOI”) from investor, endorsement letter from the State Government) before signing the exclusivity agreement.

(3) The Commission shall not grant a Permit or Licence or approve a Tripartite Contract as applicable to a Mini-Grid Developer for a certain site, where an exclusivity agreement has been executed in respect of that site.

(4) The Commission shall not grant an extension of an Exclusivity Period beyond 12 months where the site is within the 5 year extension plan of a Distribution Licensee. The Mini-Grid Developer is recommended to consult the Commission or the Distribution Licensee before signing the initial exclusivity agreement with the community.

(5) Notwithstanding the right granted in S. 21(1)(a), the Distribution Licensee reserves the right to integrate the Community to its distribution network.



22. Procedure for Securing Compliance with the Permit or Tripartite Contract as applicable

  1. Where the Commission, on the basis of material evidence in its possession is satisfied that the Mini-Grid Operator is contravening, or is likely to contravene, the terms and conditions of the Permit or Tripartite Contract as applicable, it shall serve an order to the Mini-Grid Operator to do, or not to do, such things as are specified in the order for the purpose of rectifying or avoiding any contravention or threatened contravention of any term or condition of the Permit or Tripartite Contract as applicable.

  2. The order shall specify the period within which the Mini-Grid Operator shall rectify or avoid the contravention or threatened contravention of any term or condition of the Permit or Tripartite Contract as applicable.

  3. Upon expiry of the period specified in the order, if no compliance is achieved, the Commission shall proceed to enforce the order through the enforcement mechanism established by it.

23. Proceedings before the Commission

(1) All proceedings before the Commission under this regulation shall be governed by the Business Rules of the Commission as may be amended from time to time.

24. Complaints Procedure

(1) Unless otherwise stated in this regulation, all customer complaints shall be resolved in accordance with the Complaints Procedure Guidelines in Annex 9.

25. Dispute Resolution

(1) Disputes between parties in connection with this regulation shall be resolved in line with the Dispute Resolution Mechanism in Annex 10.

26. Amendment or repeal

(1) The Commission may amend or repeal, in whole or in part, the provisions of this regulation.





THE COMMON SEAL OF

NIGERIAN ELECTRICITY REGULATORY COMMISSION

Was affixed pursuant to the ORDER OF THE COMMISSION




On this ……............................ day of…….........................................…………………. 2017.


28


Anex1a-Agreement Form For An Exclusive Project Development Period At A Site For An Isolated Mini

Agreement Form For An Exclusive Project Development Period At A Site For An Isolated Mini-Grid


N.B – This is a template form that can be amended to suit the specific circumstance and peculiarities of the parties



This Agreement is dated [XXX]



Between

[XXXX], a company duly incorporated under the laws of the Federal Republic of Nigeria with registration number [RC Number] and having its registered office at [OFFICE ADDRESS] called the “Mini-Grid Developer”.

And

[XXXX] a legally authorised representative of [NAME OF COMMUNITY] in its capacity as [Village Head] called the “Community Representative”.

OR

[XXXX] a Company/Association duly incorporated/registered under the laws of the Federal Republic of Nigeria and having its registered office at [OFFICE ADDRESS] acting as the legally authorised representative of [NAME OF COMMUNITY/CHAIRMAN OF THE LOCAL GOVERNMENT AREA] called the “Community.

(In this Agreement, the Mini-Grid Developer and Community Representative are referred to as “Parties” or “Party”).



Recital/ Background

  1. The Mini-Grid Developer is in the business of developing and constructing Mini-Grids.



  1. The Mini-Grid Developer seeks to develop a Mini-Grid to supply electricity to the Community from electricity generated by the Mini-Grid.



  1. The Mini-Grid Developer has identified the Location as suitable for a Mini-Grid in accordance with the Mini-Grid Regulations and seeks to undertake feasibility studies preparatory to developing a Mini-Grid to supply electricity to the Community.



  1. In view of the above, the Community Representative has agreed to grant the Mini-Grid Developer an exclusivity period to develop the Mini-Grid under the terms set out in this Agreement.



NOW THEREFORE, the Parties agree as follows:



  1. Definitions and Interpretations



    1. In this Agreement each of the following words and expressions shall have the following meanings:



Confidential Information

shall include but is not limited to technical know-how, information and data, plans, strategies, techniques, processes, operations, formulae, proprietary information and material belonging to any of the Parties in respect of the Mini-Grid Project.


Effective Date

means the date of this Agreement.


Exclusivity Period

means the Initial Exclusivity Period, Supplementary Exclusivity Period and any further extensions of the exclusive period granted pursuant to Clause 4.


Location



NERC”

Means the area within the distribution network where a Mini-Grid is proposed to be located.


means the National Electricity Regulatory Commission.


Permit

means a Permit granted by NERC to a Mini-Grid Operator for the construction, operation, maintenance and where applicable ownership of Mini-Grids.


Technical Codes

shall have the same meaning in the Mini-Grid Regulations.



    1. In this Agreement, except where the context otherwise requires:



      1. any reference to “this Agreement” includes the Schedules and Annexures to it, each of which forms part of this Agreement for all purposes;



      1. if a period of time is specified as from a given day, or from the day of an act or event, it shall be calculated exclusive of that day; and



      1. if a period of time is specified as to a given day, or to the day of an act or event, it shall be calculated inclusive of that day.



  1. Commencement



This Agreement shall commence on the Effective Date.



  1. Mini-Grid Project



The Parties agree that the Mini-Grid Developer shall have the right to investigate, develop and commission a Mini-Grid in the Community (“Mini-Grid Project”).



  1. Exclusivity Period



    1. The Exclusivity Period shall start on the Effective Date and shall end [12 or 24 months] after (“Initial Exclusivity Period”) unless extended pursuant to this Clause 4 in this Agreement.



    1. Where the Initial Exclusivity Period is for 12 months, the Community Representative shall have the discretion to extend the Initial Exclusivity Period for up to an additional 12 months after the expiration of the Initial Exclusivity Period (“Supplementary Exclusivity Period”), provided that the Mini-Grid Developer has made significant progress to the satisfaction of the Community. [NOTE: the Parties can set out specific conditions precedent that needs to be satisfied by the Parties during the exclusivity period.]



    1. A Supplementary Exclusivity Period can only be granted by the Community Representative subject to NERC’s approval.



    1. An Initial Exclusivity Period that exceeds 12 months can only be granted with NERC’s approval.



    1. Pursuant to Clause 4.3, NERC’s approval for the extensions shall be granted provided that:



      1. the Parties are able to set out progress made and provide a justification to the satisfaction of the Community why an extension is required; and



      1. any delays experienced are due to no fault of the Mini-Grid Developer.



    1. Where the Initial Exclusivity Period exceeds 12 months, the Mini-Grid Developer and the Community shall in addition to this Agreement, execute Form A in Schedule 1 and thereafter submit to NERC for approval.



    1. Where a Supplementary Exclusivity Period is required, the Mini-Grid Developer and the Community shall execute Form B in Schedule 1 and thereafter submit to NERC for approval.



    1. Where an extension is required, the Mini-Grid Developer shall duly notify the Community Representative at least a month before the expiration of the Exclusivity Period using the applicable form in Schedule 1 to this Agreement stating the reasons for the extension.



  1. Duties and Obligations of the Parties



    1. For the duration of the Exclusivity Period, the duties and obligations of the Community Representative shall be as follows:



      1. The Community Representative shall not and shall ensure that the Community does not:



        1. directly or indirectly take any action to solicit, initiate, encourage, assist the submission of any proposal, negotiation or offer from any person or entity for the purpose of developing, installing, commissioning and/or operating a Mini-Grid; and



        1. act in a manner that will adversely affect the Mini-Grid Project.



      1. Cooperate in good faith and provide the Mini-Grid Developer all such information, documentation and authority required for the Mini-Grid Project.



    1. For the duration of the Exclusivity Period, the duties and obligations of the Mini-Grid Developer shall be as follows:



      1. undertake the feasibility and investigations required for Mini-Grid Project in a timely manner;



      1. ensure that the Mini-Grid Project is in compliance with the Technical Codes.



  1. Time is of the Essence



The Parties agree that, for the purpose of this Agreement and for the duration of the Exclusivity Period, they will carry out their respective obligations with respect to the Mini-Grid Project in a timely and efficient manner.



  1. Post Exclusivity Period



    1. At the end of the Exclusivity Period, where the Mini-Grid Developer decides to implement the Mini-Grid Project:



      1. A definitive agreement will be executed between the Parties;



      1. The Mini-Grid Developer shall comply with the Mini-Grid Regulations 2016.



    1. At the end of the Exclusivity Period, where the Mini-Grid Developer decides not to implement the Mini-Grid Project:



      1. it shall duly notify the other Party stating the reasons for its decision;



      1. make the necessary restorations required following investigative activities undertaken for the Mini-Grid Project; and



      1. Save for Clause 7.2.2, the Mini-Grid Developer shall have no liability.



  1. Termination



    1. This Agreement may terminate by mutual agreement by all Parties.



    1. This Agreement automatically terminates, where the Parties execute a definitive agreement pursuant to Clause 7.1.1 for the Mini-Grid Project.



    1. The Community Representative may terminate this Agreement on written notice to the other Parties if:



      1. it decides to expand before the expiration of the Exclusivity Period;



      1. where the Mini-Grid Developer breaches Clause 5.2.1 and Clause 5.2.3.



      1. Mini-Grid Developer abandons the Project for a period of more than 3 consecutive months;



    1. The Mini-Grid Developer may terminate this Agreement on written notice to the other Parties if:



      1. it decides not to pursue the Mini-Grid Project; or



      1. the Community Representative breaches Clause 5.1



  1. Remedies


If during the Exclusivity Period, the Community Representative breaches any of its obligations to the Mini-Grid Developer which results to a loss suffered by the Mini-Grid Developer, the Community Representative must reimburse the Mini-Grid Developer all the costs incurred as a result of the loss.


  1. Confidential Information



    1. A Party shall not intentionally disclose or allow to be disclosed to any third party any Confidential Information concerning the other Parties or any information obtained under this Agreement and in furtherance to the execution of the Mini-Grid Project unless:



      1. the disclosure is expressly assented to in writing by the Party to which the Confidential Information belongs; or



      1. the disclosure is subject to a legal obligation of disclosure.



    1. Each Party, after consultation with the others, shall adopt reasonable procedures to preserve the Confidential Information of the other Parties.



    1. No information shall constitute Confidential Information if:



      1. the information is generic in nature, or have at the relevant time become public knowledge or has been in the public domain, other than as a result of disclosure by the Parties or their representative;



      1. the information has at the relevant time become, already in the possession of the Parties free from any obligation of confidentiality to either of the Parties or any other person and has not been acquired by any person in breach of any obligations of confidentiality;



      1. the information is required to be disclosed by law or order of any court, tribunal or agency of competent jurisdiction or by any governmental body, department or agency having jurisdiction or it or by any equivalent laws or regulations of institutions or other equivalent authorities in jurisdictions outsider Nigeria; or



      1. the information is expressly stated in writing to be non-confidential.



  1. Non-Circumvention



    1. At any time prior to the expiration of the Exclusivity Period and two years thereafter, it is expressly agreed that the identities of any individual or entity and any other third parties (including, without limitation, suppliers, customers, financial sources, manufacturers and consultants) discussed and made available by the any Party in respect of the Mini-Grid Project and any related business opportunity shall constitute Confidential Information and the recipient or any group company or associated entity or individual shall not (without the prior written consent of the disclosing Party):


      1. directly or indirectly initiate, solicit, negotiate, contract or enter into any business transactions, agreements or undertakings with any such third party identified or introduced by the disclosing Party; or


      1. seek to by-pass, compete, avoid or circumvent the disclosing Party from any business opportunity that relates to the Mini-Grid Project by utilising any Confidential Information or by otherwise exploiting or deriving any benefit from the Confidential Information.

    1. Except insofar as the Party was engaged in a prior business relationship with the individual or entity or third party.



  1. Entire Agreement



The Parties agree that this Agreement including the Schedules and the Forms therein executed for extensions of the Exclusivity Period constitutes the entire Agreement between the parties irrespective of all previous agreements, promises, assurances, warranties, representations and understanding between them, whether written or oral, relating to its subject matter.



IN WITNESS whereof this Agreement was executed the day and year first above written.



For [MINI-GRID DEVELOPER]

Signed at …………………….. on this ………….. day of ……………… 2016.

By:

Name:

WITNESSES

1.                                                    



2.                                                    



For [COMMUNITY REPRESENTATIVE]

Signed at …………………….. on this ………….. day of ……………… 2016.

By:

Name:

WITNESSES

1.                                                    



2.                                                    



Schedule 1

Form A – Initial Exclusivity Period Request Form

Company Representative name: _____________________________

Company name: _________________________________

Company address: ________________________________

Company registration number: _________________________

Duly authorised representative of the abovementioned company

and

Community Representative name: _____________________________

Position: _______________________________________

Address: _______________________________________

Duly authorised representative of the Community of [Name of Community]

Pursuant to Clause 4.1, 4.4 and 4.6 of the Exclusivity Agreement dated [ ], I [ NAME ], the Mini-Grid Developer of the Mini-Grid Project, hereby request for an initial exclusivity period for [ ] months (“Initial Exclusivity Period”). The reasons for exclusivity are as follows: [NOTE: The Parties shall only use Form A for an Initial Exclusivity Period which exceeds 12 months. Where the Initial Exclusivity Period does not exceed 12 months, the Agreement shall be sufficient].

(Reasons of your request and/or forecasted tasks to be performed):

____________ ____________________________________________________________

________________________________________________________________________

(Attach the necessary documentation to support the above request)

I, [NAME OF COMMUNITY REPRESENTATIVE] hereby grant the exclusivity requested under the same terms and conditions of the Agreement. Thus, the exclusivity period expires on XX of the month of XXXXX of the year XXXX.

This exclusivity is subject to approval of National Electricity Regulatory Commission (NERC).

Date: ___________



_______________________

Signature: [NERC Representative]

Date: ___________



__________________________

Signature: [Mini-Grid Developer Representative

Date: __________



___________________________

Signature: [Community Representative]



Form B – Supplementary Exclusivity Period Request Form



Company Representative name: _____________________________

Company name: _______________________________

Company address: _____________________________

Company registration number: __________________________

Duly authorised representative of the abovementioned company

and

Community Representative name: _____________________________

Position: _____________________________________

Address: _____________________________________

Duly authorised representative of the Community of [Name of Community]

Pursuant to Clause 4.2, 4.3 and 4.7 of the Exclusivity Agreement dated [ ], I [ NAME ], the Mini-Grid Developer of the Mini-Grid Project, hereby request for an extension of an additional [XX] months (“Supplementary Exclusivity Period”) under the same terms and conditions of said Agreement.

(Reasons of your request and/or outstanding tasks to be performed):

________________________________________________________________________

________________________________________________________________________

(Attach the necessary documentation to support the above request)

I, [NAME OF COMMUNITY REPRESENTATIVE] hereby grant the extension requested under the same terms and conditions of the Agreement. Thus, the extended exclusivity period expires on XX of the month of XXXXX of the year XXXX.

Date: ___________



_______________________

Signature: [NERC Representative]

Date: ___________



__________________________

Signature: [Mini-Grid Developer Representative

Date: __________



___________________________

Signature: [Community Representative]







Anex1b-Agreement Form For An Exclusive Project Development Period At A Site For An Interconnected Mini

Agreement Form For An Exclusive Project Development Period At A Site For An Interconnected Mini-Grid

N.B – This is a template form agreement that can be amended to suit the specific circumstance and peculiarities of the parties.



This Agreement is dated [XXX]

Between

XXXX, a company duly incorporated under the laws of the Federal Republic of Nigeria and having its registered office at [OFFICE ADDRESS] hereinafter called the “DisCo” which expression shall where the context so admits include its successors-in-title.

And

XXXX, a company duly incorporated under the laws of the Federal Republic of Nigeria with registration number [RC Number] and having its registered office at [OFFICE ADDRESS] hereinafter called the “Mini-Grid Developer”.

And

[XXXX] a legally authorised representative of [NAME OF COMMUNITY] in its capacity as [Village Head] hereinafter called the “Community Representative”.

OR

[XXXX] a Company/Association duly incorporated/registered under the laws of the Federal Republic of Nigeria and having its registered office at [OFFICE ADDRESS] acting as the legally authorised representative of [NAME OF COMMUNITY/CHAIRMAN OF THE LOCAL GOVERNMENT AREA] hereinafter called the “Community”.

(In this Agreement, the DisCo, Mini-Grid Developer and Community Representative are referred to collectively as “Parties” and individually as “Party”.)



Recital/ Background

  1. The Mini-Grid Developer is in the business of constructing and developing Mini-Grids.



  1. Pursuant to Section 67 of the Electric Power Sector Reform Act (“EPSRA”), Nigerian Electricity Regulatory Commission (“NERC”) has issued to the DisCo a distribution Licence to undertake distribution activities and other related businesses within [AREA OR ZONE WHERE THE DISCO CAN OPERATE] which includes the Distribution Network.



  1. The Mini-Grid Developer has identified the Location as suitable for a Mini-Grid in accordance with the Mini-Grid Regulations, 2016 and seeks to undertake feasibility studies preparatory to developing a Mini-Grid to be connected to the DisCo’s distribution network described in Schedule 1 below to supply electricity to the Community.

  1. In view of the above, the Community Representative and the DisCo have agreed to grant the Mini-Grid Developer an exclusive period to develop the Mini-Grid under the terms set out in this Agreement.



NOW THEREFORE, in view of the foregoing and in consideration of the mutual benefits to be derived contained herein, and any other good and valuable consideration, the sufficiency of which is hereby acknowledged, and intending to be legally bound, the Parties hereby agree as follows:



  1. Definitions and Interpretations



    1. In this Agreement each of the following words and expressions shall have the following meanings:



Confidential Information




Effective Date

shall include but is not limited to technical know-how, information and data, plans, strategies, techniques, processes, operations, formulae, proprietary information and material belonging to any of the Parties in respect of the Mini-Grid Project.


means the date of this Agreement.


Exclusivity Period



Location



Permit



means the Initial Exclusivity Period any further extensions of the exclusive period granted pursuant to Clause 4.


means the area within the distribution network where a Mini-Grid is proposed to be located.


means a Permit granted by NERC to a Mini-Grid Operator for the construction, operation, maintenance and where applicable ownership of Mini-Grids.


Technical Codes

shall have the same meaning as in the Mini-Grid Regulations


Tripartite Contract

means the contract between an Interconnected Mini-Grid Operator, Distribution Licencee and Connected Community which shall be as agreed between the Parties



    1. In this Agreement, except where the context otherwise requires:



      1. any reference to “this Agreement” includes the Schedules and Annexures to it, each of which forms part of this Agreement for all purposes;



      1. if a period of time is specified as from a given day, or from the day of an act or event, it shall be calculated exclusive of that day; and



      1. if a period of time is specified as to a given day, or to the day of an act or event, it shall be calculated inclusive of that day.



  1. Commencement



This Agreement shall commence on the Effective Date.



  1. Mini-Grid Project



The Parties agree that the Mini-Grid Developer shall have the right to investigate, develop and commission a Mini-Grid in the Community (“Mini-Grid Project”).



  1. Exclusivity Period



    1. The Exclusivity Period shall commence on the Effective Date and shall terminate [12 or 24] months thereafter (“Initial Exclusivity Period”).



    1. Where the Initial Exclusivity Period is for 12 months, the DisCo and the Community Representative shall have the discretion to extend the Initial Exclusivity Period for up to an additional 12 months after the expiration of the Initial Exclusivity Period (“Supplementary Exclusivity Period”), provided that the Mini-Grid Developer has made appreciable progress to the satisfaction of the DisCo and Community [NOTE: the Parties can set out specific conditions precedent that needs to be satisfied by the Parties during the exclusivity period.]



    1. Where an extension is required, the Mini-Grid Developer shall duly notify the DisCo and the Community Representative at least a month before the expiration of the Exclusivity Period using the applicable form in Schedule 1 to this Agreement stating the reasons for the extension.



  1. Duties and Obligations of the Parties



    1. For the duration of the Exclusivity Period, the duties and obligations of the DisCo and the Community Representative shall be as follows:



      1. The DisCo and the Community Representative shall ensure that the Community does not:



        1. directly or indirectly take any action to solicit, initiate, encourage, assist the submission of any proposal, negotiation or offer from any person or entity for the purpose of developing, installing, commissioning and/or operating a Mini-Grid ; and



        1. act in a manner that will adversely affect the Mini-Grid Project.



      1. Cooperate in good faith and provide the Mini-Grid Developer all such information, documentation and authority required for the Mini-Grid Project.



    1. For the duration of the Exclusivity Period, the duties and obligations of the Mini-Grid Developer shall be as follows:



      1. undertake the feasibility and investigations required for the Mini-Grid Project in a timely manner;



      1. ensure that the Mini-Grid Project is in compliance with the Technical Codes.



  1. Time is of the Essence



The Parties agree that, for the purpose of this Agreement and for the duration of the Exclusivity Period they will carry out their respective obligations with respect to the Mini-Grid Project in a timely and efficient manner.



  1. Post Exclusivity Period



    1. At the end of the Exclusivity Period, where the Mini-Grid Developer decides to implement the Mini-Grid Project, a Tripartite Contract will be executed between the Parties;



    1. At the end of the Exclusivity Period, where the Mini-Grid Developer decides not to implement the Mini-Grid Project:



      1. it shall duly notify the other Parties stating the reasons for its decision;



      1. make the necessary restorations required following investigative activities undertaken for the Mini-Grid Project; and



      1. Save for Clause 7.2.2, the Mini-Grid Developer shall have no liability.



  1. Termination



    1. This Agreement may terminate by mutual agreement by all Parties.



    1. This Agreement automatically terminates, where the Parties execute a Tripartite Contract for the Mini-Grid Project or any other definitive agreement.



    1. The DisCo and/or Community Representative may terminate this Agreement on written notice to the other Parties if:



      1. it decides to expand before the expiration of the Exclusivity Period;



      1. where the Mini-Grid Developer fails to make appreciable progress with the Exclusivity Period and this is as a result of no fault of the Disco or Community; or



      1. where the Mini-Grid Developer breaches Clause 5.2.1 and Clause 5.2.3.



    1. The Mini-Grid Developer may terminate this Agreement on written notice to the other Parties if:



      1. it decides not to pursue the Mini-Grid Project; or



      1. where the DisCo or the Community Representative breaches Clause 5.1.



  1. Remedies



If during the Exclusivity Period, the Community Representative and/or the DisCo breaches any of its obligations to the Mini-Grid Developer which results to a loss suffered by the Mini-Grid Developer, the Community Representative and DisCo will be held jointly liable and must reimburse the Mini-Grid Developer all the costs incurred as a result of the loss.



  1. Confidential Information



    1. A Party shall not intentionally disclose or allow to be disclosed to any third party any Confidential Information concerning the other Parties or any information obtained under this Agreement and in furtherance to the execution of the Mini-Grid Project unless:



      1. the disclosure is expressly assented to in writing by the Party to which the Confidential Information belongs; or



      1. the disclosure is subject to a legal obligation of disclosure.



    1. Each Party, after consultation with the others, shall adopt reasonable procedures to preserve the Confidential Information of the other Parties.



    1. No information shall constitute Confidential Information if:



      1. the information is generic in nature, or have at the relevant time become public knowledge or has been in the public domain, other than as a result of disclosure by the Parties or their representative;



      1. the information has at the relevant time become, already in the possession of the Parties free from any obligation of confidentiality to either of the Parties or any other person and has not been acquired by any person in breach of any obligations of confidentiality;



      1. the information is required to be disclosed by law or order of any court, tribunal or agency of competent jurisdiction or by any governmental body, department or agency having jurisdiction or it or by any equivalent laws or regulations of institutions or other equivalent authorities in jurisdictions outsider Nigeria; or



      1. the information is expressly stated in writing to be non-confidential.



  1. Non-Circumvention



    1. At any time prior to the expiration of the Exclusivity Period and two years thereafter, it is expressly agreed that the identities of any individual or entity and any other third parties (including, without limitation, suppliers, customers, financial sources, manufacturers and consultants) discussed and made available by the any Party in respect of the Mini-Grid Project and any related business opportunity shall constitute Confidential Information and the recipient or any group company or associated entity or individual shall not (without the prior written consent of the disclosing Party):


      1. directly or indirectly initiate, solicit, negotiate, contract or enter into any business transactions, agreements or undertakings with any such third party identified or introduced by the disclosing Party; or


      1. seek to by-pass, compete, avoid or circumvent the disclosing Party from any business opportunity that relates to the Mini-Grid Project by utilising any Confidential Information or by otherwise exploiting or deriving any benefit from the Confidential Information.


    1. Except insofar as the Party was engaged in a prior business relationship with the individual or entity or third party.


  1. Entire Agreement



The Parties agree that this Agreement including the Schedules and the Forms therein executed for extensions of the Exclusivity Period constitutes the entire Agreement between the parties irrespective of all previous agreements, promises, assurances, warranties, representations and understandings between them, whether written or oral, relating to its subject matter.



IN WITNESS whereof this Agreement was executed the day and year first above written.

For [MINI-GRID DEVELOPER]

Signed at …………………….. on this ………….. day of ……………… 2016.

By:

Name:

WITNESSES

1.                                                    



2.                                                    

For [ELECTRICITY DISTRIBUTION COMPANY]

Signed at …………………….. on this ………….. day of ……………… 2016.

By:

Name:

WITNESSES

1.                                                    



2.                                                    



For [COMMUNITY/COMMUNITY REPRESENTATIVE]

Signed at …………………….. on this ………….. day of ……………… 2016.

By:

Name:

WITNESSES

1.                                                    



2.                                                    



Anex2-REGISTRATION FORM FOR MINI

REGISTRATION FORM FOR MINI-GRIDS BELOW 100 KW

(Pursuant to S. 8 (1) (b) of the NERC Regulations for Mini-Grids, 2016)

IMPORTANT NOTES

Your Registration is incomplete unless all required documents are submitted.

NERC reserves the right to verify the accuracy of this information.



In compliance with the NERC Mini-Grid Regulations, 2016 I am herewith certifying that I [NAME], _______________ have commissioned a Mini-Grid system of up to 100 kW of Distributed Power on _________ (date)



I hereby apply to register my project as a Mini-Grid below 100 kW.



1.0 PARTICULARS OF APPLICANT AND CONTACT PERSON

Name of Applicant:________________________________________________

Physical address: __________________________________________________

Postal address: ___________________________________________________

Tel: ____________________________________________________________

Fax:____________________________________________________________

Mobile Phone: ___________________________________________________

E-mail: _________________________________________________________

Website Address: ________________________________________________

Name of Contact Person: __________________________________________

Mobile Phone of Contact Person: _____________________________

E-mail for Contact Person:______ ___________________________________



2.0 LEGAL STATUS OF APPLICANT

2.1 Indicate legal status of Applicant (Tick relevant option)

  1. Sole Proprietorship

  2. Partnership

  3. Public Limited Liability Company

  4. Private Limited Liability Company

  5. Cooperative Society

  6. Incorporated Trustee

  7. Other (please specify)



(Attach Certificate of Registration, Certificate of Incorporation, Memorandum and Articles of Association, Deed of Partnership, Deed of Trust, as applicable)



3.0 NATURE OF APPLICATION

3.1 State whether Application is a fresh Application or Renewal

________________________________________________________________________

3.2 Existing Permits/Licences/Tripartite Contracts

Does the Applicant have an existing Permit or Licence and/or Tripartite Contract issued by the Commission for other systems?

_________________________________________________________________________

If yes, state the nature of the Permit/Licence/Tripartite Contract, date issued and the Permit/Licence/Tripartite Contract number.

_________________________________________________________________________

3.3 Refusal, Suspension or Cancellation of Permit/Licence/Tripartite Contract

Has the Applicant ever been refused a Permit/Licence/Tripartite Contract or had its Permit/Licence/Tripartite Contract suspended and/or cancelled by the Commission?

____________________________________________________________________________

If yes, give details of the refusal, suspension, and/or cancellation.

____________________________________________________________________________



4.0 MAIN BUSINESS ACTIVITIES OF APPLICANT

Please indicate the main business activities the Applicant is currently engaged in. __________________________________________________________________________ __________________________________________________________________________



5.0 DESCRIPTION OF PROJECT

5.1 Site of the Mini-Grid (State, Local Government Area, Ward, Village)

(Attach title document to the land, relevant maps and drawings)

5.2 Generation


Type of system

Size in kW

Generation

Solar

Wind

Biomass

Hydro

Diesel


________ kW

________ kW

________ kW

________ kW

________ kW

Total : ________ kW

Storage

______________

________ kW

Inverters

______________

________ kW



Location of the Power Plant (geographical coordinates):



____________________________________________________________________



Is the Power Plant new? If no, please state number of years the plant has been in operation





5.3 Distribution


Type of system

Size of system

Lines

Single phase MV

Three-phase MV

Single phase LV

Three-phase LV



________ metres

________ metres

________ metres

________ metres

Total : ________ metres

Type of Lines

Overhead

Underground

Poles

Cement

Wood

Other


________ poles

________ poles

________ poles

Total : ________ poles

Transformers

______________

________ kW



Length of distribution network (indicate geographical coordinates of four reference points)

___________________________________________________________________________

5.4 Customers

Number of customers:

  • Residential: __________

  • Commercial: __________

  • Industrial: __________

  • Special: __________



5.5 Revenue and Sources of Funding

Expected electricity sales [kWh/year]: _____________________________________________

Electricity tariff [NGN/kWh or flat rate per W]:________________________________________

Share Capital contribution (specify foreign or local):____________________________________

Loan capital (specify source and provide evidence):_____________________________________

Others (specify):_________________________________________________________________



DECLARATION BY THE APPLICANT

The project is not unlawful or contrary to the interest of the Federal Republic of Nigeria, provisions of the Electric Power Sector Reform Act and relevant NERC Regulations. I/we hereby declare that the details stated above are, to the best of my/our knowledge, true and correct.

Dated this ________________ day of __________________________________ 20_________



THE COMMON SEAL OF THE WITHIN NAMED APPLICANT

(Name of Applicant)



Has hereunto been affixed in the presence of:

Sign:


Sign:

Name:

Name:

Designation:

Designation:



Sworn to this ________ day of __________________ 200________ at ________________

BEFORE ME

_______________________________________________________________________

NOTARY PUBLIC/COMMISSIONER OF OATHS



Anex3-APPLICATION FORM FOR MINI

APPLICATION FORM FOR MINI-GRID PERMIT

(Pursuant to S.7 and S. 8 (1) (a) of the NERC Regulations for Mini-Grids, 2016)

IMPORTANT NOTE: Your Application is incomplete unless all required documents are submitted and the application is accompanied by the appropriate processing fee.

In compliance with the NERC Mini-Grid Regulations, 2016, I am herewith certifying that I [NAME]__________, hereby apply for a Permit pursuant S. 7 or S. 8 (1) (a) of the Mini-Grid Regulations.



1.0 PARTICULARS OF APPLICANT AND CONTACT PERSON

Name:___________________________________________________________

Physical address: __________________________________________________

Postal address: ___________________________________________________

Tel: ____________________________________________________________

Fax:____________________________________________________________

Mobile Phone: ___________________________________________________

E-mail: _________________________________________________________

Website Address: ________________________________________________

Name of Contact Person: __________________________________________

Mobile Phone of Contact Person: ______________________________

E-mail of Contact Person:______ ____________________________________



2.0 LEGAL STATUS OF APPLICANT

2.1 Indicate legal status of Applicant (Tick relevant option)

  1. Sole Proprietorship

  2. Partnership

  3. Public Limited Liability Company

  4. Private Limited Liability Company

  5. Cooperative Society

  6. Incorporated Trustee

  7. Other (please specify)

(Attach Certificate of Incorporation, Memorandum and Articles of Association, Deed of Partnership, Deed of Trust, as applicable)



3.0 NATURE OF APPLICATION

3.1 State whether Application is a fresh Application or Renewal

_________________________________________________________________________

3.2 Existing Permit/Licences/Tripartite Contract

Does the Applicant have an existing Permit/Licence/Tripartite Contract issued by the Commission for other systems?

_________________________________________________________________________

If yes, state the nature of the Permit/Licence/Tripartite Contract, date issued and the Permit/Licence/Tripartite Contract number

_________________________________________________________________________

3.3 Refusal, Suspension or Cancellation of Permit/Licence/Tripartite Contract

Has the Applicant ever been refused a Permit/Licence/Tripartite Contract or had its Permit/Licence/Tripartite Contract suspended and/or cancelled by the Commission?

___________________________________________________________________________

(b) If yes, give details of the refusal, suspension, and/or cancellation.

___________________________________________________________________________



4.0 MAIN BUSINESS ACTIVITIES OF APPLICANT

Please indicate the main business activities the Applicant is currently engaged in. __________________________________________________________________________ __________________________________________________________________________



5.0 DESCRIPTION OF PROJECT

Detailed description of the project:






5.1 Site of the Mini-Grid (State, Local Government Area, Ward, Village)

(Attach title document to the land, relevant maps and drawings)

5.2 Generation


Type of system

Size in kW

Generation

Solar

Wind

Biomass

Hydro

Diesel


________ kW

________ kW

________ kW

________ kW

________ kW

Total : ________ kW

Storage

______________

________ kW

Inverters

______________

________ kW



Location of the Power Plant (geographical coordinates):



_______________________________________________________________________

Is the Power Plant new? If no, please state number of years the plant has been in operation.





5.3 Distribution


Type of system

Size of system

Lines

Single phase MV

Three-phase MV

Single phase LV

Three-phase LV



________ metres

________ metres

________ metres

________ metres

Total : ________ metres

Type of Lines

Overhead

Underground

Poles

Cement

Wood

Other


________ poles

________ poles

________ poles

Total : ________ poles

Transformers

______________

________ kW



Length of distribution network (indicate geographical coordinates of four reference points)

___________________________________________________________________________

5.4 Customers

Number of customers:

  • Residential: __________

  • Commercial: __________

  • Industrial: __________

  • Special: __________



5.5 Revenue and Sources of Funding

Expected electricity sales [kWh/year]: ___________________________________________

Electricity tariff [NGN/kWh or flat rate per W]: ___________________________________

Share Capital contribution (specify foreign or local):________________________________

Loan capital (specify source and provide evidence):________________________________

Others (specify):____________________________________________________________



6.0 DECLARATION BY THE APPLICANT

The project is not unlawful or contrary to the interest of the Federal Republic of Nigeria. I/we hereby declare that the details stated above are, to the best of my/our knowledge, true and correct.

Dated this ________________ day of ________________ 20_________.



THE COMMON SEAL OF THE WITHIN NAMED APPLICANT









(Name of Applicant)

Has hereunto been affixed in the presence of:



Sign:


Sign:

Name:

Name:




Sworn to this ________ day of __________________ 200________ at ________________

BEFORE ME

_______________________________________________________________________

NOTARY PUBLIC/COMMISSIONER OF OATHS



ACCOMPANYING DOCUMENTATION

PLEASE REMEMBER TO SUBMIT 2 HARD COPIES AND A SOFT COPY OF ALL SUPPORTING DOCUMENTS



  1. Contract between the Community Representative and Mini-Grid Operator, where applicable

  2. Power station layout drawings

  3. Map with position of power station and distribution network marked using indicators to distinguish single phase and three phase as well as medium voltage networks

  4. Certified copy of Certificate of Incorporation, Memorandum and Articles of Association, Deed of Partnership or Deed of Trust, as applicable

  5. Certified copy of Certificate of Occupancy or Lease Agreement for Project Site

  6. Certified copy of building permit

  7. Filled Standardized Spreadsheets for Tariff Calculation





Anex4-REPORTING FORM

REPORTING FORM

In compliance with the NERC Mini-Grid Regulations, 2016 S. 13, I [NAME], ______________ am presenting the report on the following Mini-Grid.



1.0 PARTICULARS OF COMPANY; CONTACT PERSON AND MINI-GRID

Company Name:________________________________________________

Physical address: __________________________________________________

Postal address: ___________________________________________________

Tel: ____________________________________________________________

Fax:____________________________________________________________

Mobile Phone: ___________________________________________________

E-mail: _________________________________________________________

Website Address: ________________________________________________

Name of Contact Person: __________________________________________

Mobile Phone of Contact Person: _____________________________

E-mail for Contact Person: _________________________________________



Name of Mini-Grid site: __________________________________________

Geographical coordinates of the Mini-Grid: _____________________________



2.0 SYSTEM SIZE; COST AND REVENUE REPORTING

Year

2016

2017

2018

2019

Number of customers





Size of generation plant per component





Revenue from electr. sales





Other revenue





Fuel Cost





O&M Cost





Replacement Cost





Other cost (Please specify)





Profit/Loss







3.0 INCIDENCES AND ACCIDENTS



Description of incident 1:



Date and time of incident:





Description of incident 2:



Date and time of incident 2:





Description of incident 3:



Date and time of incident 3:





4.0 SIGNATURE

I herewith confirm that the above information is true according to the best of my knowledge.



Name, Date,





Signature



Anex5-APPLICATION PROCEEDINGS FOR REGISTRATION

APPLICATION PROCEEDINGS FOR REGISTRATION, PERMIT OR TRIPARTITE CONTRACT

These proceedings for a Permit/Tripartite Contract shall guide the Mini-Grid Developers to make use of the NERC Mini-Grid Regulations, 2016. It shall not replace the regulation itself. In case of any conflict between the regulations and this document, the regulations shall prevail.

  1. Key considerations

In order to apply for a Permit or the approval of a Tripartite Contract, the process differs if the main grid is already present in the area where the project will be developed or the site is off-grid.

Where an area has no existing distribution grid, the area is considered as unserved and may receive an Isolated Mini-Grid.

Where the grid is present but the area is poorly electrified or has a non-functional distribution-grid, it is considered as underserved and is eligible for an Interconnected Mini-Grid.

  1. Unserved areas – isolated Mini-Grids

The entire application process for unserved areas is summarised in the figure 1 (left part) and 2 located at the end of this document. In these figures, the steps are described from the point of view of the Mini-Grid Developer.

Step 1: Identification of the eligibility of unserved area

In order to be eligible, the area selected must meet the following conditions:

  • The area is being unserved.

  • The area must not have been assigned to an IEDNO (Independent Electricity Distribution Network Operator) or any other Mini-Grid Developer.

  • The area is not part of an already existing expansion plan (5-year plan) of a DisCo. Where it is identified that the area is part of an expansion plan of a DisCo, the Mini-Grid Developer needs the consent of the DisCo before the area identified becomes eligible.

If the area identified fulfils all the requirements listed above, the process can continue and the contact with the Community can be established.

As a repository of the expansion plans of the DisCos and applications from IEDNOs and other Mini-Grid developers, NERC may also assist Mini-Grid developers in identifying a suitable area that fulfils the above mentioned criteria. Federal and State authorities responsible for electrification should also be consulted.



Step 2: Contact with the Community and Settlement of an Exclusivity Period

Now, that the area located can potentially receive an Isolated Mini-Grid, the Community concerned should be contacted in order to know whether the local population is interested in benefitting from the services provided by the Mini-Grid Operator.

Both, the Community or the Mini-Grid Developer can approach the other party to start negotiations.

At that stage, the Community and the Mini-Grid Developer can decide to set an exclusivity period.

This exclusivity period is used to investigate the feasibility of implementing a Mini-Grid at the location and ensures that no other operator is conducting any other feasibility during the investigation period.

The exclusivity period is an agreement only between the Community and the Mini-Grid Operator is only valid up to 12 months. This period could then be extended once and only for a further 12 months subject to the approval of the Commission.

If at the inception, the Mini-Grid Operator needs an exclusivity period of more than 12 months, it can also enter into an exclusivity agreement. However, this would need to be justified, submitted to the Commission and the agreement approved by the Commission.

The Annex 1A of the NERC Mini-Grid Regulations, 2016 (called “Agreement for exclusivity period”) provides a form that shall be used to draft the exclusivity agreement.

Step 3: Size of the system and registration

If the power distributed by the isolated Mini-Grid is larger than 100 kW, the Mini-Grid Developer will need to apply for a mandatory Permit. If the Generation Capacity of the power station installed is larger than 1 MW the plant is not a Mini-Grid under this regulation and other regulations apply. Generation Capacity is defined as the guaranteed active power that a generation plant can supply to a load or network at any point in time under the given environmental constraints (temperature, humidity, etc.) and a power factor of 0.8 (inductive) for at least one hour under the assumption that the plant is well maintained and fully functional;

If the power distributed by the isolated Mini-Grid is below 100 kW, the Mini-Grid Developer can voluntarily apply for a Permit following the same procedure as for the mandatory permit.

A distribution network distributes a power up to 100 kW if the average active power fed into the distribution network in each 15 min interval of its operation period is below or equal to 100 kW.

In case it is granted with the Permit by the Commission, the Mini-Grid Operator will be entitled to receive a compensation before the Mini-Grid can be connected to the main distribution grid and will enjoy any other protection given to the Mini-Grid Operator under the Mini-Grid Regulations, 2016.

The Mini-Grid Operator that has been granted a Permit will need to establish an agreement with the beneficiary community. The Mini-Grid Operators may decide to use the template included in Annex 12.

In case the Mini-Grid Developer decides not to apply for a Permit, it shall register by submitting the registration form called “Registration form for Mini-Grids smaller 100 kW” (Annex 2 of the NERC Mini-Grid Regulations, 2016).



  1. Underserved areas – Interconnected Mini-Grids

The entire application process for underserved areas is summarised in the figure 1 (right part) and 3 located at the end of this document. In these figures, the steps are described from the point of view of the Mini-Grid Developer/Operator.

Step 1: Identification of the eligibility of an underserved area

In order to be eligible, the Community concerned should be first contacted in order to know whether the local population is interested in benefitting from the services provided by the Mini-Grid Operator. The Community selected should meet the following criteria:

  • The Community is being underserved. The main grid is present in that area, but does not provide a sufficient level of service to meet the Community’s electricity demand.

  • The Community is ready to pay higher tariffs than the main grid tariff in order to improve the reliability of electricity supply.



Step 2: Contract with the Distribution Licencee and Settlement of an Exclusivity Period

Once it has been established that the area located can potentially receive an Interconnected Mini-Grid, the Distribution Licencee should be contacted to know if it would be willing to enter in a Tripartite Contract (refer to Annex 11 for a proposed template).

At that stage, the Community, the Mini-Grid Developer and the Distribution Licencee can decide to set an exclusivity period.

This exclusivity period is used to investigate the feasibility of implementing a Mini-Grid at the location and ensures that no other operator is conducting any other feasibility study during the investigation period.

The exclusivity period is an agreement between the Community, the Mini-Grid Developer and the Distribution Licencee valid for up to 12 months. However, this period can be extended once and only for a further 12 months subject to the approval of the Commission (refer to Annex 1B).

If at the inception, the Mini-Grid Developer needs an exclusivity period of more than 12 months, it can also enter into an exclusivity agreement. However, this would need to be justified to the Commission and the agreement approved by the Commission.