Economic Evaluation of Gas Power Plant Project for the First Gas Industrial Park in Nigeria

In this paper, discounted cash flow analysis and Monte Carlo simulation were used to evaluate the Gas Power Plant Project for the first Gas Industrial Park in Nigeria. These methods gave maximum insight into the basis for investment decision and show the profitability of gas fired generation. A Net Present Value of $10.8 million at a discount rate of 15% and an Internal Rate of Return (IRR) of 16% with a payback period of 9 years was realized. Probabilistic result gave a 62.8% certainty of having a positive NPV and IRR values above the hurdle rate for investment. The capacity factor, capital cost and debt capital were uncertain parameters that will have huge effect on the power project. The study concludes that the gas fired power plant project in the industrial park is economically viable.