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Azura Power to Raise $700 Million to Build Nigerian Plant

Vegetable sellers ply their wares by the light of locally-made lanterns in Lagos. Blackouts are a daily occurrence in Nigeria, Africa’s most populous country with more than 160 million people. Photographer: Sunday Alamba/AP
Vegetable sellers ply their wares by the light of locally-made lanterns in Lagos. Blackouts are a daily occurrence in Nigeria, Africa’s most populous country with more than 160 million people. Photographer: Sunday Alamba/AP

April 25 (Bloomberg) -- Azura Power West Africa Ltd., a Nigerian electricity producer, plans to fund at least 70 percent of a $700 million plant in Benin City with debt from local and international markets, Chief Executive Officer David Ladipo said.

Standard Chartered Bank Plc has been appointed to lead the fundraising, he said in an April 22 interview in the capital, Abuja. The International Finance Corp. and the Dutch development bank FMO will also participate, he said.

“We expect to close the financing by the end of the year, do the ground-breaking and start construction,” Ladipo said.

The IFC was appointed to work with FMO on the share of funds to come from “development finance” for the Azura plant, Desmond Dodd, a spokesman for the World Bank unit in Washington, said yesterday in an e-mailed statement. FMO will “arrange $450 million” with the IFC, Paul Hartogsveld, a Hague-based FMO spokesman, said today in an e-mailed response to questions. There were no immediate replies to e-mails sent to Standard Chartered seeking comment.

Blackouts are a daily occurrence in Nigeria, Africa’s most populous country with more than 160 million people. Electricity demand is almost double the supply of about 4,000 megawatts. The government is offering incentives to investors, including five-year tax breaks and permission to charge higher electricity tariffs, according to the Abuja-based Bureau of Public Enterprises.

Four equity partners including Amaya Capital Partners, Aldwych International, Asset & Resource Management Co., and African Infrastructure Investment Managers will provide the remaining 30 percent of the funds, Ladipo said.

The 450 megawatts Azura-Edo Independent Power Plant will be built by Siemens AG and Julius Berger Nigeria Plc, the country’s biggest construction company. Located in the capital of southern Edo state, it is on the Escravos-Lagos pipeline corridor and near a government-owned transmission line, Ladipo said.

Construction will be completed in three years and the plant will “have good access to gas and a good ability to evacuate the power as well,” he said.

To contact the reporter on this story: Elisha Bala-Gbogbo in Abuja at ebalagbogbo@bloomberg.net

To contact the editor responsible for this story: Dulue Mbachu at dmbachu@bloomberg.net

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