Document background
The Prepaid Power Purchase Agreement is a specialized contract used in the Nigerian power sector when parties wish to establish a power supply arrangement based on advance payments. It is particularly relevant in scenarios where consumers seek reliable power supply while providers require payment security. The document incorporates requirements from the Nigerian Electricity Regulatory Commission (NERC), the Electric Power Sector Reform Act, and other relevant regulations. It typically includes detailed provisions for metering systems, payment mechanisms, power specifications, and operational procedures. This agreement type is commonly used for industrial and commercial consumers, independent power projects, and in situations where traditional post-paid arrangements may not be suitable due to credit risk or operational preferences. The prepaid structure helps manage payment risks while ensuring consistent power supply, making it particularly valuable in the Nigerian market where payment security is often a key consideration.
