The International Finance Corporation is funding the Edo Power Plant which will provide electricity to 14 million consumers with $80 million debt facility
| By Anayo Ezugwu | Dec. 15, 2014 @ 01:00 GMT |
THE International Finance Corporation, IFC, is to provide $80 million (N13.16) debt facility to Azura Power West Africa Limited. The fund is to finance the 450 megawatts gas-fired Azura-Edo Independent Power Project in Nigeria.
IFC, a member of the World Bank Group, on Monday, December 1, which signed the agreement with the company said in statement that the money would help strengthen Nigeria’s gas-to-power value chain and deliver electricity to almost 14 million residential consumers in the country.
A breakdown of the facility showed that IFC is providing $50 million, about N8.5 billion, in debt for its own account, and $30 million, about N5.1 billion of subordinated debt, for a total of $80 million. IFC is also mobilising $212.5 million (N36.125 billion), of which $177.5 million (N30.175 billion) 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 said it acted as co-lead arranger with FMO for the senior DFI tranche of the financing. The balance of debt financing, according to the IFC, is being provided by international commercial lenders, co-arranged by Standard Chartered Bank, Rand Merchant Bank and guaranteed by the World Bank and the Multilateral Investment Guarantee Agency. The First City Monument Bank, FCMB, is administering a local currency facility provided from the Central Bank of Nigeria’s, CBN, Power and Airline Intervention Fund through the Bank of Industry. Standard Chartered Bank is the Global Lead Arranger for the project.
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 IFC stated that the project has been developed by a consortium of investors led by Amaya Capital Limited, a principal investment firm focusing on energy projects in West Africa, The other shareholders are American Capital Energy and Infrastructure, the Africa Infrastructure Investment Fund, Aldwych International Limited, Pan African Infrastructure Development Fund 2 LLC, and the Asset & Resource Management Company Limited.
Commenting on the development, Sundeep Bahanda, co-founder of Amaya Capital and David Ladipo, managing director, Azura-Edo IPP, in a joint statement said: “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.”
Also, Bernie Sheahan, director for infrastructure at IFC, said: “This project is a cornerstone of the World Bank Group’s Energy business plan for Nigeria to support the country’s extensive energy reform programme. 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.”
According to him, said the IFC has worked closely with its sister institutions of the World Bank Group, which are providing additional support to this landmark transaction. He added that the Azura-Edo IPP is the first project to benefit from the World Bank Guarantees.