The Multilateral Investment Guarantee Agency (MIGA), the political risk insurance and credit enhancement arm of the World Bank Group, has announced its support to Azura-Edo Independent Power Producer (IPP) in Nigeria.

MIGA's guarantees for the project total $492m, covering equity investments by Amaya Capital, American Capital Energy and Infrastructure, Aldwych Azura, the African Infrastructure Investment Fund 2 Power Holding, and Asset and Resource Management.

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.

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

Hedging instruments by Standard Chartered and RMB are also covered by MIGA's guarantees.

The power project—which has reached financial close—is expected to bring reliable and affordable energy to the nation's grid.

MIGA said that nearly 12 million residential consumers will be served by the project.

Requiring financing of about $900m, 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 $1.7bn 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.

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% of its population still has no access to electricity.

Keiko Honda, MIGA Executive Vice President and CEO, said: "Bringing cleaner, more diverse, reasonably-priced and more abundant power, Azura-Edo's impact on livelihoods and economic activity is solid.”

"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," she added.