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VENTURES AFRICA – Nigeria’s power sector reform process has received another boost as American Capital Energy & Infrastructure (ACEI) pledged $130 million to support the Azura Power Holdings Limited power project.
Azura Power, which is responsible for developing the proposed 450 megawatts open cycle gas turbine power station in Benin City, Edo State in Nigeria’s South Western region, said it would use the ACEI’s investment to fund the first and second phases of the Azura-Edo 1,000MW power project, pursue its greenfield development pipeline and future acquisitions, expand its team, and grow its construction and operational capabilities.
ACEI’s investment in Azura “is in recognition of the significant progress made by the Azura co-founders on the first phase of the Azura-Edo power project, the growth opportunities in the Nigerian and West African markets, and our confidence in the Federal Government of Nigeria’s power sector reform programme,” Chief Executive Officer and co-founder of ACEI, Mr. Paul Hanrahan said.
The first phase of the plant, which is targeted to reach financial closure in early 2014 is expected to come on stream in 2016/2017. It is also expected to create over 1,000 jobs during its construction and operation.
Azura and the Nigerian Bulk Electricity Trading Plc signed a power purchase agreement on April 22, 2013, which is being used as a template for other project-financed independent power producers in the country.
In June 2013, the firm joined Power Africa, a United States government initiative launched by President Barrack Obama that is focused on supporting economic growth and development in Africa to increasing clean and reliable access to electrical power.
Hanrahan said the US government, along with the governments of Ethiopia, Ghana, Kenya, Liberia, Nigeria, Tanzania and private sector partners, are collaborating to accelerate and spur investments in the continent.
As a partner in the presidential initiative, ACEI is actively pursuing investments in African power companies to originate, develop, finance and operate regional energy infrastructure assets in West Africa, East Africa and Southern Africa, which, over the next four years, could reach $800 million in total investment.
ACEI Director of Africa Investments, Lisa Pinsley, confirmed that the initiative is part of the company’s Power Africa efforts and a significant one at that being a leading independent power producer platform in a key African market.
“Nigeria is the most populous country in Africa with one of the highest growth rates in the world. With a current population of over 170 million, the seventh largest in the world, Nigeria’s expanding economy suffers from a lack of power infrastructure.”
“The United Nations estimates that Nigeria’s population will reach 230 million within the next 20 years, and the total grid-based power generation capacity must rise tenfold to 40,000MW to meet the demand. Azura is, and will continue to be, a key driver in this growth in capacity,” Pinsley said.