On Monday, the International Finance Corporation (IFC), member of the World Bank, signed an agreement with Azura Power West Africa Limited to supply them with US$80 million debt financing for their first 450MW gas fired Azura-Edo Project in Nigeria, the IFC said in a statement.
Azura Power signed the agreement with the Edo State Government and is expected to facilitate Nigeria’s gas to power value chain to expand electricity access to 14 million consumers in the region. Despite having a wealth of gas deposits, an estimated 35 percent of the Nigerian population have access to modern electricity.
The project includes the construction, operation and maintenance of an open-cycle gas power plant, development of a 330kv transmission line and an underground gas pipeline spur connecting the plant to the region’s main gas trunk line, IFC said in a statement.
The development involves a group of investors namely Amaya Capital Limited, American Capital Energy and Infrastructure, the Africa Infrastructure Investment Fund 2, Aldwych International Limited, Pan African Infrastructure Development Fund 2 LLC, and the Asset & Resource Management Company Limited.
Co-founder of Amaya Capital, Mr. Sundeep Bahanda, and Dr. David Ladipo, Managing Director of the Azura-Edo IPP, said that this agreement was the result of many years of hard work from all parties involved:
‘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.’
The IFC is providing the total US$80 million of which US$30 million is allocated to ‘subordinated debt’. According to the IFC they have prepared a further US$212.5 million of which US$177.5 million has been raised with Dutch DFI Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden, FMO, a group of eight development finance institutions who have a long-term finance agreement.
The remainder of the debt financing is coming from a pool of foreign investors who were arranged by the Standard Chartered Bank, SCB, and Rand Merchant Bank, RMB, which was approved by the World Bank and the Multilateral Investment Guarantee Agency, MIGA.
Director for Infrastructure at IFC, Bernie Sheahan acknowledged the dedication which the World Bank has towards developing the energy sector in West Africa.
‘This project is a cornerstone of the World Bank Group’s Energy Business Plan for Nigeria to support the country’s extensive energy reform program…
The World Bank Group’s substantial involvement in the Azura-Edo power project confirms its commitment to help the Federal Government of Nigeria develop a sustainable gas-to-power sector’, he said.