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ARM, others lead financing for $1bn power plant

By on October 21, 2014

Asset & Resource Management Company, one of the co-developers and equity sponsors of the $1bn Azura-Edo Independent Power Plant, says the financing of the project is a model for similar ones.

ARM’s investment in the 450-megawatt Azura project is planned to be made through the new $250m specialist Infrastructure Fund that ARM is setting up in partnership with Harith General Partners Proprietary Limited of South Africa, according to Azura Power Holdings Limited, the developer of the project.

Other equity sponsors include West Africa-focused investment firm, Amaya Capital Partners; American Capital Energy & Infrastructure, a part of American Capital Ltd; Aldwych International and African Infrastructure Investment Managers.

“This particular project is a pathfinder in terms of private investment in infrastructure in the power sector. In terms of the financial side, it is bringing in about $1.1bn of capital both in mix of foreign and local investment,” said the managing director of ARM, Mr. Opuiyo Oforiokuma.

“The financing structure of the project is a model for other IPP developers in the country,” he further said.

Established in Lagos in 1994, ARM currently manages total assets of over $3bn and has evolved into one of Nigeria’s most innovative and respected non-bank financial institutions, Azura said in a document.

It noted that ARM sponsored the pioneering Lekki Toll Road Concession in Lagos and was honoured by Capital Finance International as the “2013 Best Fund Manager in Nigeria.”

“Bank funding is being obtained from 14 lending institutions in eight different countries including Standard Chartered Bank, International Finance Corporation, First City Monument Bank, Rand Merchant Bank and FMO,” said Azura.

Standard Chartered Bank is the global lead debt arranger and the co-lead arranger for the Commercial Bank debt tranche. RMB is also a lead arranger in this regard.

The IFC and the Dutch Development Finance Company FMO are the co-lead arrangers for the debt being raised from the development finance institutions.

FCMB successfully led Azura’s application for support from the CBN Power and Aviation Infrastructure Fund.

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 biggest gas distribution pipeline. It is the first phase of a 1,500MW power plant facility.

The 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.

Azura Power had in May this year announced the completion of the signing of the key industry contracts and confirmation on the debt financing of the project.

 

 

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