Notore, ContourGlobal Plan $600 Million Nigerian Power Plant
Notore Chemical Industries Ltd., a Nigeria fertilizer producer, is investing $600 million to build a power plant at its factory in the southern town of Onne, Ikponwosa Izedonmwen, the company’s head of corporate finance, said.
The 500-megawatt plant will be built jointly with ContourGlobal LP, a New York-based investment company specializing in the electric-power industry, Izedonmwen said on May 6 in an e-mailed response to questions. Financing will come from export credit agencies and development banks, with local lenders making up the balance, he said.
“Repayment of the loan/investment will come solely from the cash flow of the project being funded, not from other assets of the project sponsors,” Izedonmwen said. He declined to provide the names of lenders involved. ContourGlobal didn’t immediately respond to e-mails and a call 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. Nigeria plans to boost electricity output to 10,000 megawatts by next year and double that by 2016, Power Minister Chinedu Nebo said on April 22. South Africa, with less than a third of Nigeria’s population, has the capacity to generate about 40,000 megawatts of power.
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.
Notore has an agreement with Japan’s Mitsubishi Corp. (8058) to build a new plant at its Onne complex, according to its website. The company currently operates a fertilizer plant with capacity to produce 350,000 metric tons of ammonia a year, 500,000 tons of urea and 650,000 tons of a “bulk blend” of nitrogen, phosphorus and potassium, or NPK fertilizer.
Construction of the power plant will start in the second-half of next year and it is expected to be completed by the third quarter of 2016.
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