News Column

Standard Chartered structuring bank and global mandated lead arranger in Azura-Edo

May 6, 2014



Azura Power Holdings Ltd announced that it has completed the signing of the industry contracts and confirmation on the debt financing of its flagship 450MW Azura-Edo Independent Power Project (Azura-Edo IPP) in Edo State, Nigeria. The $750 million transaction 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 $220 million of equity and $530 million of debt from a consortium of local and international financiers. The announcement was made at a formal signing ceremony to mark the conclusion of the key project and financing agreements that form part of the wider transaction.

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 accessability 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.

Speaking on behalf of the Global Mandated Lead Arranger, Mrs Bola Adesola, the CEO of Standard Chartered Bank Nigeria said: "We are proud to have played a leading role in structuring the financing for this ground breaking transaction, which creates a template for other similar transactions. Our advisory, structuring and financial contribution to this transaction forms part of the Bank's $2 billion pledge to President Obama's 'Power Africa' campaign launched last year, which aims to bring electricity to more than 20 million Africans within five years. We are on course to exceed our $2 billion target well ahead of time, which is more than 20 per cent of the total private sector commitment."

The fundraising was led by Standard Chartered Bank as Global Mandated Lead Arranger, with the International Finance Corporation (IFC), Financierings-Maatschappij voor Ontwikkelingslanden (FMO), Rand Merchant Bank (RMB) and First City Monument Bank (FCMB) acting as Mandated Lead Arrangers and the Core Lender Group.

As Structuring Bank, Standard Chartered has facilitated in developing a balanced, diverse capital structure comprised of equity, senior and subordinated debt. The Lender group consists of a mix of commercial banks, multilaterals and DFIs, international and local commercial banks.  Standard Chartered is lending its expertise in the administration of the transaction via its additional role as 'Joint Documentation Bank'.  Loan draw-downs are expected to commence from May 2014 and should be concluded within three months. 


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Source: CPI Financial


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