The Emerging Africa Infrastructure Fund (EAIF), a member of the Private Infrastructure Development Group (PIDG), has lent €28m to a €330m expansion of the Azito Energie gas-fired power station in Côte D’Ivoire.

Martijn Proos, Director at EAIF’s fund managers, Investec Asset Management, said:“Azito Energie is a proven business with a management team that has  operated  a successful plant for a number of years.”

“Expanding Côte D’Ivoire’s base load electricity capacity will improve the resilience of the economy, which is of fundamental importance in fragile states. It will help stimulate business activity and improve domestic life. Public services such as health and education will also benefit from the greater availability of power at affordable prices.”

Azito is owned 77% by Globeleq Africa Holding and 23% by Industrial Promotion Service (West Africa). 

Known as Azito 4, the additional 253MW capacity being installed at the plant will bring its output up to 710MW, representing 30% of Cote D’Ivoire’s installed generating capacity.

The plant produces electricity at low-cost, with only local hydro-electric facilities providing cheaper power.

Globeleq, the plant owner and operator, announced financial close on January 22.

This is the second loan EAIF has made to Azito.

In 2012, it loaned the company $30m towards the construction of the first plant.

The new financing, which has a term of 15.5 years, met a funding gap that EAIF was comfortable bridging because of the successful management of the existing plant and its resilient cash flows.

In addition, the demand for energy in Côte D’Ivoire, and regionally, continues to grow.

The additional capacity to the  power station will produce 2,170 GHh of electricity annually.

Using an OECD formula for measuring the impact of new generating capacity, Azito 4 has the potential to provide cheaper and cleaner power to up to 4.9 million people.

Construction of the new plant is expected to take around 30 months. All the power produced at the plant is bought by Compagnie Ivoirienne d’Electricité, (CIE) which is a private utility, listed on the Abidjan Stock Exchange and majority owned by Eranove, a leading provider of electricity and drinking water production and public service management in West Africa.

CIE supplies the the locally sourced gas to fuel the power plant.

In addition to the EAIF, the lending group is the International Finance Corporation, Proparco and Western African Development Bank (BOAD). 

The other lenders are the African Development Bank (AfDB), OPEC Fund for International Development (OFID), FMO, DEG and BIO.

BOAD is providing financing in XOF, the local currency, while other banks are financing in EUR.

Azito 4 is being financed 80% by debt and 20% by equity.

Alastair Herbertson, Director at Investec Asset Management, said: “Projects like this are a demonstration of how investors can produce both financial returns, and generate tangible impact through their investments. The EAIF portfolio, managed by the team at Investec Asset Management, ensures that each project contributes directly, demonstrably and quantifiably to furthering sustainable development across the continent.”