06 August 2013, Lagos – Guaranty Trust Bank Plc, NSE and multilateral financial institution, Africa Finance Corporation, AFC, have provided a US$170 million (N27.2 billion) facility to Mainstream Energy Solutions Limited Consortium, MESL, for the acquisition of Kainji Power station, one of the former assets of the Power Holding Company of Nigeria, PHCN.
The signing of the syndicated acquisition facility took place at GTBank corporate head office in Lagos over the weekend.
Speaking at the signing ceremony, Col. Sani Bello, Chairman, MESL, said that the facility is for the purpose of part- financing the concession of Jebba Power station and Kainji Hydro Electric Plc.
According to him, “The financing represents an important milestone for the economy in its bids to play a key role in the power sector reform initiative of the Federal Government. We appreciate the support of GTBank and AFC for providing the required financing to support the company’s vision to manage and restore the nation’s foremost hydro power plants .We must also acknowledged the significant contribution of the Federal Government of Nigeria , the Federal Ministry of Power , the National Council on Privatisation , the Bureau of Public Enterprises and the regulatory agencies , who have together created an enabling environment for this acquisition.”
Commenting on the deal, Chief Executive Officer, GTBank, Mr. Segun Agbaje said that the financing underpins the lenders belief in, and support for, the ambition and the long term growth of the company, and by extension, the growth of the Nigerian Power sector to further catalyse the Nigerian economy. This is our own little way of contributing to the development of the economy. All the parties involved in this deal are credible in terms of meeting the various terms , so we are cautious in whatever we do. I congratulate Mainstream Energy for taking this bold step.”
In hs own comment, Andrew Alli , President & Chief Executive Officer of the AFC said “ The lender’s investment in Kainji Hydro Electric Plc will contribute towards reducing Nigeria’s chronic power deficit, foster economic growth and create employment.”
The debt financing facility, according to a statement by the AFC, will enable MESL — the preferred bidder of Kainji Power — to acquire the hydro-electric plants of the company with a combined capacity of 1,338 mega watts, representing about 25 per cent total electricity supplied to the national grid.
The power plants are the Kainji Hydroelectric power plant and Jebba Hydroelectric power plant located in the Kainji and Jebba regions of Northern Nigeria, within the confluence of the River Niger.
According to the statement, AFC together with GTBank, is a mandated co-arranger of the acquisition facility, providing an aggregate commitment of US$68 million (N10.88 billion) to the MESL consortium.
*Peter Egwuatu & Michael Eboh, Vanguard