Introduction3
Potential Conflicts4
Key Measurements before committing to the Nigeria take a chance5
semipolitical Measurement5
Economic Measurement6
Mitigate Political Risk6
Subscribing Political Risk Insurance6
Negotiating for better benefits from host political relation7
Reference8
Introduction
AES is a global mogul phoner and a founding-wide operator of electric propagation and dissemination businesses. The corporation owns and operates electric distribution facilities in the United States and abroad. The company is among the world’s largest independent agent companies with operations in 28 countries.
AES saw Africa as a region where it could significantly flummox its generation capacity and revenues due to execrable per capita use of electricity and the commencement of privatization of many utilities across the continent. Thus, AES is in the process of get in the Nigerian market through acquisition of a domineering equity interest in a 270-megawatt power reservoir project. Nigeria faces a serious energy crisis due to declining electricity generation from domestic power plants. Power outages are frequent and the power sector operates well below its estimated capacity.
The power system suffers from low generating plant availability and high outages on the transmission and distribution networks. Currently, only 10% of rural households and approximately 40% of Nigerias number population have access to electricity. The government plans to boost this grant to 85% by 2010. Under the plan, AES sells electricity to the National galvanising Power Authority (NEPA) under a 13.25 year power purchase agreement (PPA) effective from October 2001 and expiring in 2014. Under the PPA, avocation privatization of NEPA, Lagos State will become the purchaser of power. The Federal Government of Nigeria is the guarantor of all the payment obligations of NEPA and Lagos State. The business withal benefits from a $60M Letter of Credit which is in place to prickle the...If you want to get a full essay, order it on our website: Orderessay
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