A B C D E F G H I J K L M N O P Q R S

1 REGULATOR'S VIEW REGULATOR'S VIEW REGULATOR'S VIEW

2 ENTER CHANGES IN NEW ENTRANT ASSUMPTIONS ON ASSUMPTIONS SHEET - OCGT
3 ASSUMPTIONS Construction profile NPV Calculation Construction Period
4 Enter Values for 1st Year Power = 2012 Units Value Year % -4 -3 -2 -1 1 2 3 4 5
5 Installed capacity MW 250 -4 0%
6 Auxiliary requirements % 2.00% -3 20% Revenue
7 Average capacity degradation % 2.00% -2 40% Sent out generation GWh 1,683 1,683 1,683 1,683 1,683
8 Capacity factor % 80.00% -1 40% Capacity Price N/MWh 5,910 5,910 5,910 5,910 5,910
9 Station MLF * % 0.9195 100% FOM Price N/MWh 371 371 371 371 371
10 Energy generated GWh 1,753 VOM Price N/MWh 896 896 896 896 896
11 Energy sent out * GWh 1,683 Fuel Price N/MWh 3,438 3,438 3,438 3,438 3,438
12 Energy sent out (unit conversion) * GBTU 5,743 Total Price N/MWh 10,615 10,615 10,615 10,615 10,615
13 Sent out efficiency (LHV) % 32%
14 Fuel Input (LHV) GBTU 17,946
15 Fuel cost (HHV) $ / Mbtu 1.80 Total revenue Nk 16,428,149 16,428,149 16,428,149 16,428,149 16,428,149
16 Forex N/$ 163
17 Fuel cost (HHV) N/MMbtu 293 Costs
18 HHV to LHV Conversion ratio 1.10 Capex Nk 0 10,064,439 20,128,878 20,128,878
19 Cost of fuel Nk 5,786,898 Fixed O&M Nk 624,000 624,000 624,000 624,000 624,000
20 Capital cost N/kW 201,289 Variable O&M Nk 1,508,033 1,508,033 1,508,033 1,508,033 1,508,033
21 Total capital cost N 000 50,322,195 Fuel cost Nk 5,786,898 5,786,898 5,786,898 5,786,898 5,786,898
22 Fixed O&M N/MW/year 2,496,000 Taxation Nk 1,917,795 1,917,795 1,917,795 1,917,795 1,917,795
23 Fixed O&M (sent out) Nk/year 624,000 Carbon tax Nk 0 0 0 0 0
24 Variable O&M N/MWh 896 Other costs Nk 0 0 0 0 0
25 Variable O&M (sent out) Nk/year 1,508,033 Total costs Nk 0 10,064,439 20,128,878 20,128,878 9,836,726 9,836,726 9,836,726 9,836,726 9,836,726
26 Carbon Costs Nk
27 Other Costs Nk After tax cash flow Nk 0 -10,064,439 -20,128,878 -20,128,878 6,591,424 6,591,424 6,591,424 6,591,424 6,591,424
28 Depreciation (straight line) % 5%
29 Project Life Years 20 NPV 0
30 Pre-Tax Real WACC % 10.4%
31 Corporate tax rate % 0.32
32
33 Tariff Summary Depreciation
34 Capacity Payment N / kWh 5.9 -4 -3 -2 -1 1 2 3 4 5
35 Fixed O&M N / kWh 0.4 Depreciation Years 20
36 Variable O&M N / kWh 0.9 Book value start of period Nk 50,322,195 47,806,085 45,289,976 42,773,866 40,257,756
37 Fuel N / kWh 3.4 Depreciation charge Nk 2,516,110 2,516,110 2,516,110 2,516,110 2,516,110
38 Total N / kWh 10.6 Book value end of period Nk 47,806,085 45,289,976 42,773,866 40,257,756 37,741,646
39
40
41 * Generation revenue is reduced by MLF to allow for transmission loss Net income and tax
42 -4 -3 -2 -1 1 2 3 4 5
43
44 EBITDA Nk 0 0 0 0 8,509,219 8,509,219 8,509,219 8,509,219 8,509,219
45 Depreciation charge Nk 0 0 0 0 2,516,110 2,516,110 2,516,110 2,516,110 2,516,110
46 Taxable income Nk 0 0 0 0 5,993,109 5,993,109 5,993,109 5,993,109 5,993,109
47 Income tax expense Nk 0 0 0 0 1,917,795 1,917,795 1,917,795 1,917,795 1,917,795
48
49
50 s/b zero
51 Startup Year, 2012 N/MWh 5,910 N/MWh (0)
52 Equalized Costs N/MWh 10,615 N/MWh -
53 Fuel cost N/MWh 3,438 32.4% -
54 Fixed O&M N/MWh 371 3.5% -
55 Variable O&M N/MWh 896 8.4% -
56 Capital cost N/MWh 3,916 36.9% -
57 Tax cost N/MWh 1,139 10.7% -
58 Carbon tax cost N/MWh - 0.0%
59 Transmission loss cost N/MWh 855 8.1%
60 10,615 100.0%
61
62
63
64 Begin - PRG / LC, MIGA Calculations
91 End - PRG / LC, MIGA Calculations
92

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ENTER CHANGES IN NEW ENTRANT ASSUMPTIONS ON ASSUMPTIONS SHEET

ASSUMPTIONS NEM IPP Construction profile
Enter Values for 1st Year Power = 2012 Units Values Values Year % 2012 Startup Tariff Tariff Details
Installed capacity MW 250 250 -4 #NAME? Total N / kWh $ / MWh Capacity Payment N / kWh $ / MWh
Auxiliary requirements % 2.0% 2.0% -3 #NAME? USD 3.4 21 USD 0.0 0
Average capacity degradation % 2.0% 2.0% -2 #NAME? Naira 0.5 3 Naira 0.0 0
Capacity factor % 80.00% 80.00% -1 #NAME? Total 3.9 24 Total 0.0 0
Station MLF * % 0.9195 1.0000 #NAME? Capacity (Investment + FOM) N / kWh $ / MWh Capacity FOM Payment
Energy generated GWh 1,753 1,753 USD 0.0 0 Charge USD 0.0 0
Energy sent out * GWh 1,683 1,683 Naira 0.3 2 Multiplier Naira 0.3 2
Energy sent out * GBTU 5,743 5,743 Total 0.3 2 1.00 Total 0.3 2
Sent out efficiency (LHV) % 32% 32% Energy (Fuel + VOM) N / kWh $ / MWh Variable O&M
Fuel Input (LHV) GBTU 17,946 17,946 USD 3.4 21 USD 0.0 0
Fuel cost (HHV) $ / Mbtu 1.80 1.80 Startup Year Naira 0.2 1 Naira 0.2 1
Forex N/$ 163 163 2012 Total 3.6 22 Total 0.2 1
Fuel cost (HHV) N/MMbtu 293 293 Project Metrics US Fuel 1.80 $ / MBTU
HHV to LHV Conversion ratio 1.10 1.10 Project IRR (USD) % #NAME? USD 3.4 21
Cost of fuel (LHV) Nk 5,786,898 5,786,898 Gas Price in 2012 $/MBTU 1.80 Naira 0.0 0
Capital cost $ /kW 1,236 1,236 FOREX in 2012 NGN/USD 163 Total 3.4 21
Total capital cost $k 309,000 309,000 NGN depreciation per year % 4%
Fixed O&M N/MW/year 2,496,000 2,496,000
Fixed O&M N/MWh 371 371 This page has been created by NERC to assist the investor in understanding & analyzing his investment returns based TARIFFS 2012 2013 2014 2015 2016 2017
Fixed O&M (sent out) Nk/year 624,000 624,000 $ / MWh
on MYTO tariffs. Investor can change inputs in the green cells to refect his own assumptons. Interests during
Variable O&M N/MWh 896 896 Capacity Price 0.0 0.0 0.0 0.0 0.0 0.0
constructon have been capitalized, while other costs such as VAT, import dutes, freight, insurance, ... can be
Variable O&M (sent out) Nk/year 1,508,033 1,508,033 FOM Price 1.8 1.9 2.1 2.2 2.4 2.5
included as capital investment assumpton by the user in cell D20.
Carbon & Other Costs Nk 0 0 VOM Price 1.1 1.2 1.3 1.3 1.4 1.5
New Entrant Startup Power Year yr 2,012 Instructons: Fuel Price 21.1 21.1 27.0 27.8 28.6 29.5
Project Life Years 20 20
Enter year in cell G15 for startup year desired. Total Price 24.0 24.2 30.3 31.3 32.4 33.5
Execute Macro to have the MYTO model set the Generaton Tariff to the desired start-up year
Select Depreciation & Tax Method 3
Capital Years of Invest. Tax Changing various assumptons will impact project returns based on the MYTO calculated tariff N / MWh
Allowance Tax Holiday Allowance Examples: Capacity Price 0 0 0 0 0 0
Option 1: NERC Assumptions 5% per year 0 0% 1 - Project Financing with Debt - enter loan % of capex, borrowing rates, & loan years in range B40-D41 FOM Price 297 332 372 417 467 523
Option 2: CITA - tax holiday 90% 1st yr 3 15% 2 - Manage USD or NGN payments in range D44-D46 VOM Price 179 201 225 252 282 316
Option 3: CITA - tax holiday + 2 yrs 90% 1st yr 5 15% 3 - Enter CCGT by changing: efficiency (D13), capital costs (D20), FOM (D23), VOM (D25) Fuel Price 3,438 3,610 4,844 5,238 5,665 6,127
Option 4: CITA - no tax holiday 90% 1st yr 0 35% Total Price 3,914 4,143 5,441 5,907 6,414 6,966
Pre Tax Real WACC % #NAME?
Corporate tax rate % 32% 32%
Dividend Withholding Tax % 0.1
Debt Ratio Loan Rate Years 88.0
USD Loan %, Rate % 0.08 10
Naira Loan %, Rate % 0.2 10
Equity % 1
Currency Management - Payment in USD
Non-Escalating Capacity Payment USD % 0 1
Fixed O&M Payment USD % 0 0.2
Variable O&M Payment USD % 0 0.8
Fuel Payment USD % 0 1
Forex Assumption in 2012 NGN / USD 163 163
Forex Depreciation per year 1=PPP, 2=User, 3=NERC 3
PPP Value % 8.7%
User - (Input) % 10.0%
NERC Value % 5.0%
Avg NGN Inflation (FOM, VOM) % 12.0% 12.0%
Avg USD Inflation (FOM, VOM) % 3.0% 3.0%

* (NEM Calc) Generation revenue is reduced by MLF to allow for transmission loss

Calculations Below
Regulated costs (nominal) (N '000) 2012 2013 2014 2015 2016

N'000
Total Generation Wholesale generation costs + PPAs 359,180,928 508,303,279 720,247,667 871,456,032 994,368,268
Annual NERC Licence charge 5,387,714 7,624,549 10,803,715 13,071,840 14,915,524
Total Generation 364,568,641 515,927,828 731,051,382 884,527,872 1,009,283,792
Transmission Opex Var O&M Costs 999,987 1,119,985 1,254,384 1,404,910 1,573,499
Admin costs (fixed) 9,508,549 9,584,617 9,661,294 9,738,585 9,816,493
Fixed O&M Costs 12,631,886 14,367,735 16,087,585 18,077,779 18,257,755
Opex Subtotals 23,140,422 25,072,337 27,003,263 29,221,273 29,647,747
Return on Working Capital 282,220 401,101 434,587 468,057 506,502
Depreciation 1,525 677,856 759,056 846,681 493,107
Bulk Trader Charges 833,043 859,030 796,165 794,543 794,543
NERC Charge 351,363 392,269 422,954 458,040 459,710
Ancillary service charge 1,335,348 1,950,769 2,639,604 3,285,892 3,862,912
Total Transmission 25,943,921 29,353,363 32,055,629 35,074,485 35,764,521
All Discos Opex O&M Costs 9,292,622 9,664,327 10,050,900 10,452,936 10,871,053
Admin costs (fixed) 58,240,108 58,706,029 59,175,677 59,649,082 60,126,275
Fixed O&M Costs 27,877,865 31,223,209 34,969,994 39,166,393 43,866,360
Opex Subtotals 95,410,594 99,593,564 104,196,570 109,268,411 114,863,688
Return on Capital 112,403,527 124,221,054 134,990,455 145,978,525 157,200,553
Depreciation 48,072,538 52,733,941 57,858,171 63,246,287 68,503,882
NERC charge 3,838,300 4,148,228 4,455,678 4,777,398 5,108,522
Total Distribution 259,724,959 280,696,787 301,500,875 323,270,621 345,676,645
Total 650,237,521 825,977,979 1,064,607,885 1,242,872,979 1,390,724,957

Energy consumption
Billed sales (all discos) (GWh) 27,889 37,204 45,946 52,178 55,351
Revenue collected sales (all discos) (GWh) 26,216 35,716 45,027 51,134 54,244

Regulated Tariff
Average tariff (NGN/MWh) (billed sales) 23,315 22,201 23,171 23,820 25,126
Average tariff (NGN/MWh) (Revenue collected sales) 24,803 23,126 23,644 24,306 25,638

Tariff breakdown by sector (N/kWh) (billed sales)

Sendout from Generation GWh 38,727 50,513 61,027 67,829 71,197
Delivered to Distribution Cos GWh 35,609 46,447 56,114 62,369 65,465
Delivered to Customers GWh 31,692 41,338 49,941 55,508 58,264
Billed to Customers GWh 27,889 37,204 45,946 52,178 55,351
Collected from Customers GWh 26,216 35,716 45,027 51,134 54,244
Total Tariff, N / kWh N / kWh 24.8 23.1 23.6 24.3 25.6

Tariffs with no Losses

Generation Tariff N / kWh 9.4 10.2 12.0 13.0 14.2
Transmission Tariff N / kWh 0.7 0.6 0.5 0.5 0.5
Distribution Tariff N / kWh 6.7 5.6 4.9 4.8 4.9
Total N / kWh 16.8 16.4 17.4 18.3 19.5

Interim Calculations In Hidden Group

Estimated Losses Based on Sendout - Distribution Compounds Losses
Transmission Losses N / kWh 1.5 1.4 1.5 1.6 1.7
Distribution Losses N / kWh 2.3 2.2 2.3 2.5 2.6
Non-Tech Losses N / kWh 2.8 2.2 1.9 1.4 1.3
Uncollected Sales N / kWh 1.5 0.9 0.5 0.5 0.5
Total N / kWh 8.0 6.8 6.2 6.0 6.1

Regulated Revenue
To NERC (N '000) 9,577,376 12,165,047 15,682,347 18,307,279 20,483,756

NERC Adopted Tariff

Total (N/kWh) (Option 2) 14.0 18.2 21.8 24.3 25.6

Percentage of overall regulated tariff adopted by NERC 56% 79% 92% 100% 100%
NERC adopted Regulated costs (nominal) (NGN '000) 367,021,707 650,027,513 983,395,038 1,242,872,979 1,390,724,957
Percentage of regulated costs (non-PPA) adopted by NERC 53% 77% 92% 100% 100%
Subsidy requirement (NGN'000) 283,215,814 175,950,466 81,212,848 0 0
Subsidy requirement (N/kWh) 10.8 4.9 1.8 0.0 0.0