MIGA Guarantees Support Nigeria’s Azura-Edo IPP

MIGA Guarantees Support Nigeria's Azura-Edo IPP
Power plant will bring reliable and affordable energy,
 reaching nearly 12 million residential consumers

Washington, DC; Abuja, Nigeria – January 19, 2015—The Multilateral Investment Guarantee Agency (MIGA), the political risk insurance and credit enhancement arm of the World Bank Group, announced its support to Azura-Edo Independent Power Producer (IPP) in Nigeria. The power project—which has reached financial close—is expected to bring reliable and affordable energy to the nation's grid. Nearly 12 million residential consumers will be served by the project.

Requiring financing of about US$900 million, Azura-Edo is the first wholly project-financed IPP in Nigeria. MIGA's support is part of a larger program being implemented by the World Bank Group to mobilize nearly US$1.7 billion of private-sector financing to support Nigeria's energy reform program in general. In particular, the World Bank, the International Finance Cooperation (IFC), and MIGA have worked jointly to finance Azura-Edo with a package of guarantees, loans, and political risk insurance.

MIGA's guarantees for the project total $492 million. They cover equity investments by Amaya Capital Ltd., American Capital Energy and Infrastructure, Aldwych Azura Limited, the African Infrastructure Investment Fund 2 Power Holding, and Asset and Resource Management Ltd. MIGA is also covering commercial lending by Siemens Bank, KfW IPEX, Rand Merchant Bank, and Standard Bank—with Standard Chartered Bank acting as agent on behalf of the lenders. Hedging instruments by Standard Chartered and RMB are also covered by MIGA's guarantees.

Azura-Edo consists of the construction, operation, and maintenance of a 459-megawatt, gas-fired, open-cycle power plant in the vicinity of Benin City, Edo State, Nigeria. It also includes the construction of a short 330-kV transmission line connecting the power plant to the Benin North substation and a short underground gas pipeline spur connecting the power plant to the country's main gas trunk line. The project will deliver power not only to Nigeria, but also the broader West African Power Pool.

While Nigeria is endowed with abundant energy resources, including the world's eighth largest reserves of natural gas, 65 percent of its population still has no access to electricity.

"Bringing cleaner, more diverse, reasonably-priced and more abundant power, Azura-Edo's impact on livelihoods and economic activity is solid," said MIGA Executive Vice President and CEO Keiko Honda. She added, "Moreover—as the front-runner greenfield IPP since the Nigerian government launched sector reforms in 2010—Azura-Edo sets a precedent for future private-sector investors in the gas-to-power value chain."

"I want to underline that MIGA's support and long-term engagement have been critical for us to proceed with this investment," said Sundeep Bahanda, co-founder of Amaya Capital. "We appreciate MIGA's tenacity and long-term vision—and now look forward to delivering power to Nigeria and the region."

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MIGA was created in 1988 as a member of the World Bank Group to promote foreign direct investment into emerging economies to support economic growth, reduce poverty, and improve people’s lives. MIGA fulfills this mandate by offering political risk insurance and credit enhancement to investors and lenders.

MULTILATERAL INVESTMENT GUARANTEE AGENCY
WORLD BANK GROUP
1818 H Street, NW, Washington, DC 20433
MIGA Contact
Cara Santos Pianesi, csantospianesi@worldbank.org 1.202.458.2097

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