1,575mw to emerge from AFC, Harith merger

About 1,575 megawatts of electricity to benefit Nigeria and nine other  African  countries will  emerge from  the   joint  venture formed on major power assets by the Africa Finance Corporation (AFC) and Harith General Partners.

The deal  will require the merging of assets totalling USD3.3 billion  which belong  to both parties.

Azura-Edo IPP, a 450mw open cycle gas turbine power station located in Benin City, Edo State, will benefit from $3.3 billion finance fund from a new energy joint-venture by Lagos-based African Finance Corporation (AFC) and Harith General Partners, with offices in South Africa and Ivory Coast, capable of generating 1,575 megawatts (MW) of electricity in at least 10 countries.

“The joint venture’s near-term portfolio supplies reliable energy to over 30 million people in at least ten African countries and has a combined gross operational and under-construction capacity of 1,575mw,” they said in a statement.

Harith’s interests include Azura-Edo Independent Power Plant (IPP), a gas turbine power station in Nigeria, and Kelvin Power Station in South Africa. AFC’s include the Kpone IPP under construction in Ghana, and Cabeolica wind farm in Cape Verde.

Established in 2007, the AFC provides public and private money for major infrastructure projects around Africa and has a balance sheet of $3.2 billion.

It is 42.5 percent owned by Nigeria’s central bank, 47.6 percent by other African financial institutions and 9.8 percent by industrial and corporate shareholders,

Its founding sponsor, Amaya Capital, conceived the Azura project. The shareholders include Amaya Capital, American Capital Energy and Infrastructure, Africa Infrastructure Fund 2, Aldwych, and the ARM-Harith Infrastructure Fund.

Azura Power Holdings Limited, in May 2014, announced that it had completed the signing of the key industry contracts and confirmation on the debt financing of its flagship 450mw Azura-Edo Independent Power Project in Edo State, Nigeria.

The $750 million transaction is the first of a new wave of project-financed green-field IPPs currently being developed in Nigeria. The financing of the Azura-Edo IPP involves $220 million of equity and $530 million of debt from a consortium of local and international financiers.

In   a related development the AFC has received another $150 million 15 year loan facility from KfW [Development Bank]   .The loan agreement was signed  yesterday by Andrew Alli, CEO of AFC, and Jan Martin Witte, Head of Division for Infrastructure, of KfW.

The funds will be used to refinance projects across the corporation’s current and prospective member states in several of AFC’s priority investment sectors: power, telecommunications, transport and heavy industries.

“Africa’s infrastructure deficit is widely estimated to be approximately US$90b every year for the next decade, with spending needed for new investments as well as operations and maintenance of what is already there. Loans such as these are invaluable if we are to make substantial progress with bridging this gap and stimulating economic development on the continent.”

Andrew Alli, President and Chief Executive Officer of AFC, he said: “Not only will this loan facility from KfW add valuable capital to our finance reserves but the 15-year tenor period is particularly suited to funding the long-term, large-scale infrastructure projects that are so needed across Africa.

Jan Martin Witte, Head of Division for Infrastructure at KfW Development Bank, stated: “KfW is excited about Africa’s growth potential. To enable that growth and to build a sustainable future, countries on the continent will have to invest heavily in power, transport and other infrastructure sectors.

“As one of the world’s leading development finance institutions, KfW is proud to build partnerships with entrepreneurial institutions such as AFC that can drive development and progress on the African continent.”

Nigeria is currently generating below 2,000 megawatts of electricity because of the attack orchestrated by Niger Delta militants who claim they are fighting for the Niger Delta people.

The generating power stations are virtually grounded because of the activities of these militants.