Diamond Bank, Geometric Power, Afrigem, AMCON and StanbicIBTC sign new transaction implementation agreement on Aba Geometric Power Project
AFRIGEM Integrated Utilities Limited has signed a new transaction implementation agreement that will make it the core investor in the Aba Integrated Electricity Power Project. The agreement was signed on Tuesday in Lagos, with the sponsors of the Nigeria’s first indigenous fully integrated green-field electricity project, the Aba Integrated Power Project, Aba IPP, scheduled for commissioning in November, and its creditors.
The agreement signing ceremony which was hosted by Diamond Bank Plc, details the investment of Afrigem in the Aba IPP operating companies, the milestones for the restructuring of the existing debt stock of Geometric Power’s project companies, recapitalisation and also, the restructuring of the company. These are expected to help fast-track the commissioning of the plant to takeoff in November and start the generation and distribution of quality electricity power to the residents of Aba metropolis.
Geometric Power led the sponsors of Aba IPP while the creditors include Diamond Bank Plc, Asset Management Corporation of Nigeria, AMCON, and Stanbic IBTC Bank Plc. Afrigem, a West African focused development and investment company with a 720MW pipeline of energy solutions project in the region, is expected to inject N15 billion into the project, making Geometric Power one of the most capitalised private sector driven power companies in the sub-region. In its three-year growth plan, the sponsors and Afrigem expect to increase the plant capacity from 141MW to 341MW by 2018.
According to the parties, the capital restructuring agreement will also ensure that the project companies: Geometric Power Aba Limited and APL Electric Limited have the required capital to deliver reliable power. It will also bring on board the expertise of Afrigem’s team in the operations and management of the Aba IPP while the new capital will be applied towards the commissioning of the project and part payment to creditors with enough left to run the company.
Professor Bart Nnaji, chairman of Geometric Power Limited led the signing on behalf of the project sponsors while Samaila Zubairu, vice chairman of Afrigem, led the signing on behalf of Afrigem Integrated Utilities Limited at the ceremony attended by energy consultants, top bank executives and representatives of the various professional parties.
At the event, Caroline Anyanwu, deputy managing director and chief risk officer of Diamond Bank Plc, said that the new agreement signals a huge economic leap in the generation and distribution of electricity energy in Nigeria.
According to her, Diamond Bank is very passionate about the project because of the economic ripple effect that uninterrupted electricity power supply would bring to the numerous micro, small and medium enterprises, MSMEs, operators in Abia State and the country generally.
“I believe that the immense benefits that this new implementation agreement will bring will make Nigeria a better place especially as it will help boost economic production when the power plant starts generating power soon. We commend Geometric Power, StanbicIBTC and others that have made this to work today. We also commend AMCON for helping to bear the burden when it was very heavy for us; but the coming of Afrigem into this integrated project is a good one for all of us and for Nigeria”.
Nnaji, chairman of Geometric Power, expressed delight at the new development. He noted that Aba IPP remains the first green-field integrated power project developed by a private indigenous consortium which, upon commissioning, will deliver quality reliable 24-hour electricity supply to industries, commercial enterprises, residents of Aba metropolis and bring huge economic revival in the country.
He said: “I would like to applaud everyone who helped to see this come to pass today. We are very happy that this project is on and with this we will bring power to the people of Aba and we hope to see the economic revival that this provision will bring to Nigeria.”
Samaila, vice chairman of Afrigem, emphasised the bankability of the project model as the template for growing capacity of reliable power supply which will accelerate Nigeria’s economic growth, create jobs and unleash the creative energy of Nigerian youths. According to him, “the integrated power model is the most productive model that will help Nigeria work, we believe that it is the foundation for lighting up Nigeria”.
Kamila Omokide, head, Strategic Accounts of AMCON, stated that the entry of the new investor marked the “beginning of greatness for the project and for Nigeria.” He said that the only panacea to Nigeria’s low production capacity is to allow the private sector to be the major drivers of the economy. “We greatly believe that the private sector should be the engine of production and investment in this country. Until this is done, we may not be able to realise the productive strength and potential of Nigeria,” Omokide said.
Similarly, Angela Omo-Dare, company secretary and legal adviser of StanbicIBTC, noted that the new development was good for both the sponsor and the creditors. “It is a day that everybody should be proud of, a day that signals the beginning of another great milestone in Nigeria”, he said.
The new Transaction Implementation Agreement and the entry of Afrigem as a core investor, according to analysts, would help stimulate economic production in Aba and stem the tide of unemployment in the country.
— July 8, 2015 @ 6.30 GMT