Yemisi Izuora
The World Bank has stepped up efforts to attract international financing for the realisation of a 450 Mega Watts Azura Edo generation power plant.
The 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 $117mn and $120mn.
Along with the legal opinion from the Solicitor General, this set of documents represent the conditions necessary to enable the project’s financing close.
The $327mn-worth of guarantees will leverage the combined funding of over $900mn towards the gas-fired independent power project, involving twenty 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 $380mn of senior debt, of which $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 ($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.
