Nigeria Azura-EDO IPP
Blackouts are an everyday event in Nigeria. A weak electricity grid and insufficient generation capacity cause widespread and regular power outages, forcing millions of people to rely on costly and polluting diesel generators to keep their lights, refrigerators, and computers going.
Financing cost-effective and cleaner generation has proven problematic. The private sector has an important role, but power generation investors and lenders have traditionally been wary about Nigeria's non-payment and political risk. To help break this logjam, the World Bank Group is supporting the Azura-Edo IPP Project (Azura), a new gas-fired power plant that will provide electricity for 14 million people.
Azura is Nigeria’s first true project-financed independent power plant (IPP), and its financial structure is expected to serve as a template for further investment in the sector. The 459MW project required about $900 million in funding, which was provided by 20 equity providers and international banks. The Azura-Edo IPP reached financial close in December 2015 and began generating electricity ahead of schedule in December 2017.
PROJECT HIGHLIGHTS
Important precedents for Nigeria’s power sector were set by Azura. The project demonstrates the government's commitment to developing much-needed electricity supply.
Azura was the first power generation project in Nigeria to receive guarantee support from the World Bank and Multilateral Investment Guarantee Agency (MIGA) and funding from the International Finance Corporation (IFC).
The project’s financial design “de-risks” aspects of execution and operation. This includes mitigating exposure to major supply chain constraints. Construction and revenue risks are also managed.
Azura’s innovative financial structure is a template for further private investment in the power sector.