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Azura Power Holdings has raised $876 million for the construction of a 450-megawatt power plant in Edo State, also known as the Azura-Edo Independent Power Project.

According to a statement seen by Reuters on Thursday, Azura Power said it raised the financing from mostly foreign lenders such as Siemens Bank, the financial services arm of German corporation, Siemens AG; South Africa’s Standard Bank, Britain’s CDC Group, and the International Finance Corporation, the private sector arm of the World Bank.

"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," the statement said.
Back in 2014, Azura Power announced that it had completed the signing of key industry contracts and the confirmation of debt financing for its power plant. The company signed an engineering, procurement and construction contract with Siemens and Julius Berger, Nigeria; a gas sales and purchase contract with Seplat Petroleum worth about $300 million; and an operations and maintenance contract with Japanese construction giant, PIC Marubeni.

The Azura-Edo IPP comprises a 450 mega-watt 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 Nigeria’s main gas supply.

The power plant is the first phase of a 1,500 mega-watt facility, which is targeted to come on stream in 2017. The plant is expected to create about 1,000 jobs during its construction and operation.

Due to decades of mismanagement and lack of investment, Nigeria suffers from chronic power shortages because the country generates about 4,000 mega-watts of electricity when it needs about 40,000 mega-watts of electricity.

In 2014, the government privatized the state-owned power company, the National Electric Power Company (NEPA), selling off its generation and distribution assets to core investors. The government retained ownership of NEPA’s transmission assets, however, hiring a Canadian power firm, Manitoba, on a management contract.

Chibuike Oguh is Financial Nigeria's Frontier Markets Analyst