Hope rises for the Azura Independent Power Producer (IPP) project which is expected to add 459-megawatt to the national grid following expression of support by the Multilateral Investment Guarantee Agency (MIGA), the political risk insurance and credit enhancement arm of the World Bank Group, to the project.
This is coming on the heel of the Federal Government under the administration of President Muhammadu Buhari approving the project in order to swiftly rev up power generation in the country, following prolonged foot dragging by the previous administration.
The power project—which has reached financial close is expected to bring reliable and affordable energy to nearly 12 million residential consumers.
Requiring financing of about US$900 million, Azura-Edo is the first wholly project-financed IPP in Nigeria. MIGA’s support is part of a larger program being implemented by the World Bank Group to mobilize nearly US$1.7 billion of private-sector financing to support Nigeria’s energy reform program in general. In particular, the World Bank, the International Finance Cooperation (IFC), and MIGA have worked jointly to finance Azura-Edo with a package of guarantees, loans, and political risk insurance.
MIGA’s guarantees for the project total $492 million. They cover equity investments by Amaya Capital Ltd., American Capital Energy and Infrastructure, Aldwych Azura Limited, the African Infrastructure Investment Fund 2 Power Holding, and Asset and Resource Management Ltd. MIGA is also covering commercial lending by Siemens Bank, KfW IPEX, Rand Merchant Bank, and Standard Bank—with Standard Chartered Bank acting as agent on behalf of the lenders. Hedging instruments by Standard Chartered and RMB are also covered by MIGA’s guarantees.
Azura-Edo consists of the construction, operation, and maintenance of a 459-megawatt, gas-fired, open-cycle power plant in the vicinity of Benin City, Edo State, Nigeria. It also includes the construction of a short 330-kV transmission line connecting the power plant to the Benin North substation and a short underground gas pipeline spur connecting the power plant to the country’s main gas trunk line.The project will deliver power not only to Nigeria, but also the broader West African Power Pool.
While Nigeria is endowed with abundant energy resources, including the world’s eighth largest reserves of natural gas, 65 percent of its population still has no access to electricity.
To underscore its commitment to the on-going power sector reform, government had completed the signing of the World Bank Partial Risk Guarantees (PRGs) in support of the 450MW Azura-Edo Independent Power Project (IPP). Work…
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