A Review of the Nigerian Energy Industry

15 investors to fund power plant with $1bn

Ngozi Okonjo-Iweala05 March 2014, Abuja – The Federal Government has secured a fresh investment of $1bn (about N160bn) from 15 investors to finance the Azura-Edo Independent Power Project.

The Minister of Finance, Dr. Ngozi Okonjo-Iweala, said at a meeting with key global investors in Abuja that Azura Power Holdings Limited would work with other international investors and financiers to invest the amount in the IPP to generate an initial 450 megawatts of electricity.

She described the investment as a huge display of confidence not just in the power sector, but in the entire Nigerian economy.

The minister said the Azura project reflected the positive multiplier effects created by the capitalisation of Nigerian Bulk Electricity Trading Company and the provision of the Put Call Option Agreement being provided by the Federal Ministry of Finance.

Through this, he said the project would help to unlock about $700m of project-financed investment in a large scale IPP and about $300m worth of investments in gas processing.

Okonjo-Iweala said, “We have a visit from a group of investors for the first Greenfield Independent Power Project to be built from the scratch in Nigeria. Since we liberalised the sector, as you know, we have privatised all the power assets and opened up the sector, and this is a big project and the investment is quite large.

“About $730m, with another $300m of associated investments in gas, and we have more than 15 investors represented here, and all of them are the best of investors internationally.”

The minister said this was the first time a group of investors would come together to fund a power project to the tune of $1bn.

The lenders to the project are Standard Chartered, Rand Merchant Bank, Siemens Bank, KfW, StanbicIBTC, First City Monument Bank, FMO (Netherlands), and the World Bank Group.

Others are the International Finance Corporation, German Investment Corporation, French Investment Corporation, Emerging Africa Infrastructure Fund, ICF Debt Pool, Frontier Markets’ Fund Managers, Swedfund of Sweden and CDC of the United Kingdom.

Okonjo-Iweala said the project would be supported with guarantees and insurance coverage by the World Bank and the Multilateral Investment Guarantee Agency.

She added that the Federal Government would review the various consents and approvals such as the Power Purchase Agreement and Put-Call Option Agreement needed by the Azura plant.

Also speaking at the meeting, the Minister of Power, Prof Chinedu Nebo, said the investment was commendable, considering the number of megawatts it would add to the national grid.

– The Punch

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