Stakeholders conclude financial closure on 450mw Azura –Edo IPP

A financial closure has been concluded for the $876 million 450 megawatts (MW) Azura-Edo Independent Power Project located in Edo state.

The engineering, procurement and construction of the plant have also been contracted to two multinational companies- Siemens and Julius Berger Nigeria. The Gas Sales and Purchase Agreement has been signed with Seplat, and the Operations and Maintenance contract with PIC Marubeni. 

According to Amaya Capital, founder and majority shareholder of Azura Power Holdings, which announced financial close for the US$876 million 450MW Azura-Edo power plant, and the commencement of construction, Capital, the grounding breaking of the project which is expected to take place in the days to come, will pave the way for other projects financed by IPPs in Nigeria; and this represents the second major infrastructure investment in Nigeria.

The US$876 million transaction is the first of a new wave of project-financed Greenfield IPPs currently being developed in Nigeria.

The financing of the Azura-Edo IPP involves US$190 million of equity and US$686 million of debt from a consortium of local and international financiers.

Sundeep Bahanda, co-founder of the holdings said, “Azura is a demonstration of Amaya Capital’s long-term commitment to investing in gas and power infrastructure in West Africa, and represents Amaya’s second major investment after Seven Energy; the gas infrastructure company.

Reacting to this development, David Ladipo, managing director of Azura, said: “Nigeria should be proud, particularly at this difficult time when the world is facing so much uncertainty; it has been able to attract over $1 billion of financing to build a power and a gas facility from the world’s best-in-class financing institutions across 14 countries, as well as local financing from Nigeria itself.

We are excited at the prospect of this landmark transaction, opening the doors for additional much needed financing across the whole power sector to bring electricity to Nigeria.

“The Azura-Edo IPP is the first Nigerian power project to benefit from the World Bank’s ‘Partial Risk Guarantee’ structure. It is specifically created to meet the developing needs of emerging markets worldwide, and political risk insurance for equity and commercial debt from the Multilateral Investment Guarantee Agency, which is also a part of the World Bank group.

Significantly, the overall transaction will be underpinned by financial support provided by the Federal Government of Nigeria, through a Put and Call Option Agreement complementing the Power Purchase Agreement between the Azura-Edo IPP and the Nigerian Bulk Electricity Trading PLC.

The Azura-Edo IPP comprises a 450MW open cycle gas turbine power station; a short transmission line connecting the power plant to a local substation, and a short underground gas pipeline connecting the power plant to the country’s main gas-supply. It represents the first phase of a 1,500MW power plant facility.

This first phase of the plant, which is targeted to come on stream in 2017, is forecast to create over 1,000 jobs during its construction and operation and to supply over 12 million people in Nigeria.

Olusola Bello