A Review of the Nigerian Energy Industry

FCMB, 13 other lenders pool $1bn to finance Azura-Edo IPP

fcmb05 March 2014, Abuja — About 14 different global financial lenders, including Nigeria’s First City Monument Bank (FCMB), have collectively pulled about $1 billion to finance the 450 megawatts (MW) Azura-Edo Independent Power Plant (IPP) being developed in Edo state by Azura Power Holding Limited (APHL).

The IPP is being developed by Aldwych International, Africa Infrastructure Investment Fund (AIIM), and Asset and Resource Management (ARM) in conjunction with the government of Edo state which has about five per cent equity stake in the project.

The Azura-Edo IPP is a project-financed Greenfield power generation plant that will generate 450MW of electricity when commissioned by late 2016. It is expected to cost about $700 million to build, while an additional $300 million will be expended on developing gas supply infrastructure that will solely service the plant.

The Managing Director of APHL, Dr. David Ladipo, told reporters Monday in Abuja that as much as 14 global lending institutions have rallied financial resources to fund the power project.

Ladipo disclosed at a meeting with the Minister of Power, Prof. Chinedu Nebo, that the financiers include Standard Chartered Bank, Rand Merchant Bank, Siemens Bank, KfW Bankengruppe of Germany, Stanbic IBTC, First City Monument Bank (FCMB), The Netherlands Development Finance Company (FMO) and International Finance Corporation (IFC).

Other global financiers that on the funding party for the project as stated by Ladipo are the German Investment Corporation (DEG), French Investment Corporation, Emerging Africa Infrastructure Fund, the World Bank Group and Swedfund of Sweden amongst others.

He explained that the financial sources has unlocked more than $700 million of project-financed investment for the IPP and an additional $300 million worth of investment for gas processing which will be constructed and operated by indigenous firm, Seplat Petroleum.

According to him, the project is also being supported with guarantees and insurance coverage by the World Bank and the Multilateral Investment Guarantee Agency (MIGA) while the federal government is currently reviewing the various consets and approvals such as the Power Purchase Agreement (PPA) and Put-Call Option Agreement needed by Azura prior to financial closure which is expected in May, 2014 and the subsequent issuance of a notice to proceed to the Engineering Procurement and Construction (EPC) contractor.


– This Day

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