London, December 1, 2014 – IFC,
a member of the World Bank Group, signed agreements to provide $80 million
of debt financing to Azura Power West Africa Limited, a 450 MW gas-fired
independent power project in Nigeria (the Azura-Edo IPP). The project will
strengthen Nigeria’s gas-to-power value chain and deliver much-needed
electricity to almost 14 million residential consumers in the country.
The Azura-Edo IPP consists of the construction, operation and maintenance
of a 450 MW gas-fired open-cycle power plant located in Edo State, Nigeria.
It also includes the construction of a short 330kV transmission line and
an underground gas pipeline spur connecting the power plant to the country’s
main gas trunk line.
The project has been developed by a consortium of investors led by Amaya
Capital Ltd, a principal investment firm focused on energy projects in
West Africa. The other shareholders are American Capital Energy and Infrastructure,
the Africa Infrastructure Investment Fund 2, Aldwych International Ltd,
Pan African Infrastructure Development Fund 2 LLC, and the Asset &
Resource Management Company Ltd.
Mr. Sundeep Bahanda, co-founder of Amaya Capital and Dr. David Ladipo,
Managing Director of the Azura-Edo IPP, said in a joint statement: "The
completion of the financing is a major milestone in our project development
timeline. We have been working very closely with our financing partners
over the past few years and today’s signing reflects all the tireless
work put in by all the financiers and our advisors. ”
IFC is providing $50 million in debt for its own account, and $30 million
of subordinated debt, for a total of $80 million. IFC is also mobilizing
$212.5 million, of which $177.5 million has been jointly raised with Dutch
DFI Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden (FMO),
in long-term financing from a pool of eight development finance institutions.
IFC acted as co-Lead Arranger with FMO for the senior DFI tranche of the
financing. The balance of debt financing is being provided by international
commercial lenders, co-arranged by Standard Chartered Bank (SCB) and Rand
Merchant Bank (RMB) and guaranteed by the World Bank and the Multilateral
Investment Guarantee Agency (MIGA). First City Monument Bank (FCMB) is
administering a local currency facility provided from the Central Bank
of Nigeria’s Power and Airline Intervention Fund through the Bank of Industry.
Standard Chartered Bank is the Global Lead Arranger for the project.
“This project is a cornerstone of the World Bank Group’s Energy Business
Plan for Nigeria to support the country’s extensive energy reform program,”
said Bernie Sheahan, Director for Infrastructure at IFC. “The World Bank
Group’s substantial involvement in the Azura-Edo power project is a clear
confirmation of our commitment to help the Federal Government of Nigeria
develop a sustainable gas-to-power sector”.
IFC has worked closely with its sister institutions of the World Bank Group,
which are providing additional support to this landmark transaction: the
Azura-Edo IPP is the first project to benefit from the World Bank Guarantees
to support the mobilization of private capital in the power sector in Nigeria,
and will further gain from political risk insurance to be provided by MIGA
for equity and commercial debt.
As the first project-financed greenfield independent power project in Nigeria
since the country’s ambitious power sector reforms, the transaction is
expected to form a replicable model for future power plants in the country,
and as such pave the way for further private sector investment in Nigeria’s
energy sector. Currently, it is estimated that only 35% of the population
has access to electricity in Nigeria, despite the country housing the world’s
eighth largest gas reserves.
IFC, a member of the World Bank Group, is the largest global development
institution focused exclusively on the private sector. Working with private
enterprises in about 100 countries, we use our capital, expertise, and
influence to help eliminate extreme poverty and boost shared prosperity.
In FY14, we provided more than $22 billion in financing to improve lives
in developing countries and tackle the most urgent challenges of development.
For more information, visit www.ifc.org