Teddy Oscar, Abuja
Construction of the 450 megawatts Azura-Edo Independent Power Plant by the Azura Power Holdings will commence by June 30, Dr. David Ladipo, co-founder and joint managing director of the firm, disclosed at a transaction closure summit held on Monday in Abuja.
Ladipo, who hinted that 14 banks and financial institutions from eight countries were investing in the project, disclosed that the total investments being made in gas and power generation in order to realise the Azura-Edo IPP is in excess of $1 billion.
“The Azura-Edo IPP is the first of a new wave of greenfield project-financed IPPs under development in Nigeria, and 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 1,500mw power plant facility that is targeted to come on stream in 2017, and forecast to create over 1,000 jobs during construction and operation.
“Our target is to start construction this summer. So, we have a target to proceed on actual construction on the 30th of June. However, we might have a list of condition precedents to be satisfied before then.
“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,” he said.
He revealed that the 450mw is phase 1, while phase 2 might involve conversion to combined cycle, which would take the plant to 670mw.
“Sufficient land gas been acquired to expand the project to a 1,500mw later. We started undertaking early feasibility studies into the Nigerian power sector in 2009, also though it was not until January 2010 that we began the development of the project in earnest. Azura power was incorporated on 14 October 2010. So, we have been working on this for over four years,” he added.
The Nigerian Bulk Electricity Trader (Bulk Trader) will buy the power from Azura, when it is completed.
The event also showcased the $300 million investment being made by Seplat in new gas processing facilities at its Oben Gas Plant.
The plant, which, is part of Seplat’s joint venture with the Nigerian Petroleum Development Company (NNPC), would supply the Azura-Edo IPP with the project’s fuel gas requirements.
World Bank country director in Nigeria, Maria-Francoise Marie-Nelly, said the World Bank would provide risk guarantee, to strengthen the Bulk Trader and provide liquidity in case it is unable to pay.
Speaking at the event, the joint managing director of Azura, Sundeep Bahanda, said that the firm had committed to the local communities, that it would ensure that the is long term job creation, skill development and construction of basic infrastructure and facilities that the community needs.
“The Central Bank of Nigeria (CBN) has provided a low cost N300 billion Nigerian debt facility for aviation and power projects in Nigeria. The funds are being channelled through the Bank of Industry for on-lending to the local Nigerian banks. In the case of Azura, FCMB has received credit approval for up to $150 Million. Azura is waiting for formal confirmation from the Bank of Industry as advised by the AFC on this facility.
“Azura aims to be Nigeria’s leading independent power producer, focusing on greenfield and brownfield opportunities across the country. In five years time, we expect to be engaged across a number of power plants which are either in operation, construction or development. Indeed, Azura’s long term vision is to engage in power generation projects that will add over 3,000mw of power accounting for approximately 20 percent of Nigeria’s project installed capacity by 2020.
“Moreover, we see ourselves as being the catalyst and platform for attracting significant private capital into the power industry so that we, together with other power producers, can transform the sector and generate the electricity required for the country and social welfare,” he said.