Nigerian power plant gets US$750 million financing

Azura-nigeriaThe Azura-Edo IPP is targeted to get on the national grid in 2017. (Image source: Azura Power Holdings)Azura Power Holdings announced that it has signed major industry contracts and confirmation worth US$750mn on the debt financing of its Azura-Edo Independent Power Project (Azura-Edo IPP) in Edo State, Nigeria

The transaction by Azura signals the beginning of a set of project-financed greenfield IPPs which are currently being developed in Nigeria as part of efforts to improve power in the country.

“We are extremely proud to have completed the signing of the key industry contracts and debt financing of the Azura project and are now fully focused on starting the construction of the power plant by the summer,” said Dr David Ladipo, managing director of Azura and Sundeep Bahanda, co-founder of Amaya Capital, co-owner of Azura in a joint statement.

According to the statement, the Azura-Edo IPP has attracted world-class financiers and partners from Nigeria as well as 14 other countries across the world, an unprecedented achievement by a locally developed project.

The 450MW Azura-Edo IPP, which is the first phase of a 1,500MW power plant facility, involves equity of US$220mn and US$530mn in debt raised from a consortium of local and international financiers. It is targeted to get on the national grid in 2017 and hoped to create more than 1,000 jobs during its construction and operation.

Seplat Petroleum Development Company (Seplat) is also investing US$300mn in new gas processing facilities at its Oben Gas Plant that will see it supply the Azura-Edo IPP with the volume of gas required for the project.

“The transaction, which is NBET’s first greenfield project, is important to the Nigerian power sector reform process,” said Rumundaka Wonodi, managing director and chief executive officer of Nigerian Bulk Electricity Trading PLC (NBET).

“The NBET-Azura PPA guarantees that NBET will off-take 100 per cent of Azura Edo’s power output for the next 20 years,” Wonodi said.

According to World Bank Country Director for Nigeria, Marie-Francoise Marie-Nelly, the Azura-Edo IPP signifies a well-planned support from the World Bank, IFC and MIGA, “coming together as the World Bank Group, to catalyze the significant private investment needed to increase Nigeria’s power supply for long term economic growth, job creation and shared prosperity.”

Standard Chartered bank led the fundraising as global mandated lead arranger, with the International Finance Corporation (IFC), Rand Merchant Bank (RMB), First City Monument Bank (FCMB) and Financierings-Maatschappij voor Ontwikkelingslanden (FMO) acting as mandated lead arrangers and the core lender group.

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