American Capital Energy & Infrastructure invests $130m in Nigerian power project

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American Capital Energy & Infrastructure invests $130m in Nigerian power project

American Capital Energy & Infrastructure (ACEI), the infrastructure asset management arm of American Capital, Ltd., announced on December 5th that it has committed to invest up to $130 million in Azura Power Holdings Ltd., the company responsible for developing the Azura-Edo power project in Edo State, Nigeria.

With a goal of becoming the leading power development company in West Africa, Azura will utilize ACEI's investment to fund the first and second phases of the Azura-Edo power project, pursue its greenfield development pipeline and future acquisitions, expand its team, and  grow its construction and operational capabilities.

The Azura-Edo power project is a proposed 450MW open cycle gas turbine power station being developed near Benin City in Edo State and represents the first phase of a 1,000MW power plant facility. Azura and the Nigerian Bulk Electricity Trading Plc signed a groundbreaking power purchase agreement on April 22, 2013, which is being used as a template for other project-financed independent power producers in the country. The first phase of the plant is targeted to reach financial close in early 2014 and come on stream in 2016/2017.

Azura's first project is currently being developed by Amaya Capital and its co-developers, Aldwych International, African Infrastructure Investment Managers and ARM of Nigeria.

Mr. Paul Hanrahan, CEO and co-founder of ACEI, said:

"We are extremely pleased to announce our investment in Azura, a good example of the type of investment in high growth platforms in the energy infrastructure space that we are targeting.  Our investment 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 program."

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.

Lisa Pinsley, ACEI Director of Africa Investments, said:

"In line with our Power Africa efforts, ACEI is investing in the leading independent power producer platform in this 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."

Mr. Sundeep Bahanda, co-founder of Amaya Capital Partners, the lead sponsors of Azura, and Dr. David Ladipo, Managing Director of Azura said in a joint statement:

"ACEI's investment will exert a transformative impact on our business and accelerate Azura's drive to create a flagship, multi-asset, power generation company.  The development of Nigeria's electricity supply industry is a vast undertaking that requires a long term commitment from all parties. Together with ACEI, the Federal Government of Nigeria, state governments and our partners and advisers, we are committed to the creation of an indigenous world class business that will provide electricity to the people of Nigeria and, in so doing, will boost the country's industrial growth, its job creation and its social welfare."

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