Nigeria signs $327m World Bank guarantees for Azura plant


The Nigerian government has signed the World Bank partial risk guarantees (PRGs) in support of the 450MW Azura Edo independent power plant. The guarantees include a debt mobilisation guarantee and a liquidity guarantee, capped respectively at $117 million and $120 million. Along with the legal opinion from the Solicitor General, this set of documents represent the conditions necessary to enable the project’s financing close.
The $327 million worth of guarantees will leverage the combined funding of over $900 million towards the gas-fired independent power project, involving 20 international banks and equity finance institutions and guaranteed by the Multilateral Investment Guarantee Agency (MIGA).
The agreements involve the federal government, represented by the ministry of finance and Nigerian Bulk Electricity Trading (NBET), the World Bank as the provider of the guarantees, the project sponsors represented by Azura Power West Africa (Azura), and various lenders represented by JP Morgan, Standard Chartered, Rand Merchant Bank (RMB), Standard Bank and Siemens Bank.
Standard Chartered acted as sole structuring bank and global co-ordinating mandated lead arranger (MLA) responsible for the overall debt financing process. Six commercial banks led by Standard Chartered provided a total of approximately $380 million of senior debt, of which $234 million came from five international commercial banks guaranteed by the World Bank and MIGA and N24bn from First City Monument Bank under a local currency facility provided by the Central Bank of Nigeria’s Power and Airline Intervention Fund through the Bank of Industry.
The balance of the senior debt financing ($268 million) is provided by a pool of nine development finance institutions led jointly by the International Financial Organisation (IFC) and the Dutch Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden (FMO). IFC acted as co-lead arranger with FMO for this tranche of the financing.


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