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15 investors to fund power plant with $1bn

Minister of Finance, Dr. Ngozi Okonjo-Iweala

The Federal Government on Monday 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.

He said, “This is a very significant and huge project, but the Aba power plant was the first IPP of this sort; this is the second, but Aba is only delivering about 140 megawatts and this is planned to ultimately deliver 1,500 megawatts.

“This is about 10 times that capacity, but already, the initial take off will be 450 megawatts, which is about three times  what Aba is giving us and which will be inaugurated in a few weeks.”

On power generation in the country, the minister put the current figure at 4,000MW, adding that with the expected initial 450MW from the Azura plant, additional 10 per cent capacity would be added to the current generation.

The Managing Director, Azura-Edo Independent Power Project, Dr. Davis Ladipo, said the project was a demonstration of the success of the Federal Government’s Public Private Partnership project.

He commended the support of the Federal Government, noting that the project would commence in May and would be completed within 30 months.

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