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Nigeria’s federal government has finalised the signing of the World Bank partial risk guarantees (PRGs) in support of the 450MW Azura Edo independent power plant. The guarantees include a debt mobilisation guarantee and a liquidity guarantee, capped respectively at US$117mn and US$120mn.

The US$327 million guarantees will leverage the combined funding of over US$900 million towards the gas-fired independent power project, involving 20 international banks and equity finance institutions and guaranteed by the Multilateral Investment Guarantee Agency (MIGA).

The agreements involve the federal government, represented by the Ministry of Finance and Nigerian Bulk Electricity Trading (NBET), the World Bank as the provider of the guarantees, the project sponsors represented by Azura Power West Africa (Azura), and various lenders represented by JP Morgan, Standard Chartered, Rand Merchant Bank (RMB), Standard Bank and Siemens Bank.

Standard Chartered acted as sole structuring bank and global co-ordinating mandated lead arranger (MLA) responsible for the overall debt financing process. Six commercial banks led by Standard Chartered provided a total of approximately US$380mn of senior debt, of which US$234mn came from five international commercial banks guaranteed by the World Bank and MIGA and N24bn from First City Monument Bank under a local currency facility provided by the Central Bank of Nigeria’s Power and Airline Intervention Fund through the Bank of Industry.

The balance of the senior debt financing (US$268mn) is provided by a pool of nine development finance institutions led jointly by the International Financial Organisation (IFC) and the Dutch Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden (FMO). IFC acted as co-lead arranger with FMO for this tranche of the financing.

The Azura-Edo IPP, a 450MW Open Cycle Gas Turbine (OCGT) power station, is the first project to be initiated by Azura Power. It is part of a 1,500MW Independent Power Plant facility being developed near Benin City in Edo State, Nigeria.

A 100 hectare site has been acquired for the IPP, large enough to accommodate future expansion of the power plant. The facility is being executed in two to three phases with a tendered capacity, in open cycle and at site conditions, of 450MW in Phase 1.