IFC, a member of the World Bank Group, will provide $80m of debt financing to Azura Power West Africa, a 450 MW gas-fired independent power project in Nigeria (Azura-Edo IPP).

The project will strengthen Nigeria’s gas-to-power value chain and deliver much-needed electricity to almost 14 million residential consumers in the country.

The Azura-Edo IPP consists of the construction, operation and maintenance of a 450 MW gas-fired open-cycle power plant located in Edo State, Nigeria.

It also includes the construction of a short 330kV transmission line and an underground gas pipeline spur connecting the power plant to the country’s main gas trunk line.

The project has been developed by a consortium of investors led by Amaya Capital Ltd, a principal investment firm focused on energy projects in West Africa.

The other shareholders are American Capital Energy and Infrastructure, the Africa Infrastructure Investment Fund 2, Aldwych International, Pan African Infrastructure Development Fund 2, and the Asset & Resource Management Company.

Sundeep Bahanda, co-founder of Amaya Capital and David Ladipo, Managing Director of the Azura-Edo IPP, said in a joint statement: "The completion of the financing is a major milestone in our project development timeline. We have been working very closely with our financing partners over the past few years and today’s signing reflects all the tireless work put in by all the financiers and our advisors.”

IFC is providing $50m in debt for its own account, and $30m of subordinated debt, for a total of $80m.

IFC is also mobilizing $212.5m, of which $177.5m has been jointly raised with Dutch DFI Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden (FMO), in long-term financing from a pool of eight development finance institutions.

IFC acted as co-lead arranger with FMO for the senior DFI tranche of the financing.

The balance of debt financing is being provided by international commercial lenders, co-arranged by Standard Chartered Bank (SCB) and Rand Merchant Bank (RMB) and guaranteed by the World Bank and the Multilateral Investment Guarantee Agency (MIGA).

First City Monument Bank (FCMB) is administering a local currency facility provided from the Central Bank of Nigeria’s Power and Airline Intervention Fund through the Bank of Industry.

Standard Chartered Bank is the global lead arranger for the project.

“This project is a cornerstone of the World Bank Group’s Energy Business Plan for Nigeria to support the country’s extensive energy reform program,” said Bernie Sheahan, Director for Infrastructure at IFC.

“The World Bank Group’s substantial involvement in the Azura-Edo power project is a clear confirmation of our commitment to help the Federal Government of Nigeria develop a sustainable gas-to-power sector,” he added.

IFC has worked closely with its sister institutions of the World Bank Group, which are providing additional support to this landmark transaction: the Azura-Edo IPP is the first project to benefit from the World Bank Guarantees to support the mobilization of private capital in the power sector in Nigeria, and will further gain from political risk insurance to be provided by MIGA for equity and commercial debt.

As the first project-financed greenfield independent power project in Nigeria since the country’s ambitious power sector reforms, the transaction is expected to form a replicable model for future power plants in the country, and as such pave the way for further private sector investment in Nigeria’s energy sector.

Currently, it is estimated that only 35% of the population has access to electricity in Nigeria, despite the country housing the world’s eighth largest gas reserves.