President Jonathan Leads Azura-Edo IPP Ground Breaking, Foundation Laying Ceremony

 
Azura Power Holdings Ltd, on Friday, conducted the official groundbreaking and foundation laying ceremony at the Azura-Edo Independent Power Project (IPP) in Benin, Nigeria.

The ceremony was led by President Dr Goodluck Ebele Jonathan alongside Edo State Governor, Comrade Adams Oshiomhole and other high ranking members of the Federal and State Executives.

The ceremony marks the beginning of construction work at the project, which is on track to achieve full financial close in 2014.
 
The Azura-Edo project 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 equity and debt from a consortium of local and international financiers.

The project also incorporates an additional investment being made by Seplat Petroleum Development Company PLC ("Seplat") in new gas processing facilities at its Oben Gas Plant, which, as part of Seplat’s joint venture with the Nigerian Petroleum Development Company (NPDC), will supply the Azura-Edo IPP with the project's fuel gas requirements.

The Azura-Edo project is being developed by a consortium of local and international investors led by Amaya Capital Limited and American Capital Energy & Infrastructure.

The other sponsors contributing equity to the project are the Africa Infrastructure Investment Fund 2 (AIIF2), Aldwych International Ltd, and the Asset & Resource Management Company Ltd (ARM).

The Engineering, Procurement and Construction contractors are Siemens and Julius Berger Nigeria; with an Operations & Maintenance contract in place with the PIC Group (a subsidiary of Marubeni).

The Azura-Edo IPP is also the first Nigerian power project to benefit from the World Bank’s ‘Partial Risk Guarantee’ structure, specifically created to meet the developing needs of emerging markets world-wide, and political risk insurance for equity and commercial debt from the Multilateral Investment Guarantee Agency, also 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 agreed by Dr Ngozi Okonjo-Iweala, the Coordinating Minister for the Economy and Minister of Finance; complementing the Power Purchase Agreement that was signed in 2013 between Azura and the Nigerian Bulk Electricity Trading PLC (NBET).

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.

The plant’s location on the outskirts of Benin City is ideal because of its close proximity to Nigeria’s biggest gas distribution pipeline (which makes gas feedstock easily available) and its unique accessibility to the country’s high voltage transmission network (which facilitates the evacuation and distribution of power).

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.

The United Nations estimates that Nigeria’s population will reach 230 million within the next 20 years, and the total grid-based power generation capacity must rise, during this period, by at least tenfold to meet the demand.

Azura is, and will continue to be, a key driver in this growth in capacity.

 Mr. Sundeep Bahanda, co-founder of Amaya Capital and Dr. David Ladipo, managing director of Azura, said in a joint statement: "This ground breaking ceremony is a major milestone in our project development timeline, and the President’s endorsement a strong demonstration of the critical importance of this project to the Nigeria power sector reforms.

'By working closely with the government over a number of years the Azura-Edo project has been used to develop many of the template contracts and documentation that will be used in project financed power projects over the coming years.

"We would like to sincerely thank President Jonathan and his administration for their commitment to seeing this project to completion, and for taking the time to share today with us. We would also like to commend Governor Oshiomholefor his relentless determination to modernise the infrastructure of Edo State and thank him for his unstinting support for the Azura Project.”
 
Opiuyo Oforiokuma, managing director of the ARM Infrastructure Fund and the lead indigenous project sponsor said; “The Azura-Edo project is a leading example of the strength of partnership that can exist between indigenous and international equity partners, sponsors and financiers.

"By combining specialist local equity, through our infrastructure fund, with international equity and debt, alongside best in class contractors the Azura-Edo project is a world class example of how to develop an infrastructure project in Africa.”
 
Azura is a world-class power development company that was created to focus on the development, construction, acquisition and operation of power generation facilities in Nigeria and over time, West Africa.

Similarly, Amaya, established in 2009, is a principal investment firm focused on energy related projects in West Africa.

Also,  American Capital Energy & Infrastructure manages investments in global energy infrastructure assets, including power generation facilities, power distribution and transmission networks, energy transportation assets, fuel production opportunities and product and service companies focused on the power and energy sectors.

While African Infrastructure Investment Fund 2 (AIIF2) holds long-term equity investments in a diversified portfolio of infrastructure and infrastructure related assets across Sub-Saharan Africa, Aldwych is an energy company active in the growing economies of Africa and was established in 2004, for the purpose of developing, owning and operating power generation, transmission and distribution projects in emerging economies.
 
Established in Lagos in 1994, ARM currently manages total assets of over US$3 billion and has evolved into one of Nigeria’s most innovative and respected non-bank financial institutions.