Azura Power has signed US$750mn in debt and equity agreements for its Azura-Edo IPP in Nigeria’s Edo State.

The transaction is the first in a new wave of project-financed greenfield IPPs currently being developed in Nigeria. It comprises an equity tranche to the value of US$220mn and US$530mn in debt from a consortium of local and international financiers.

Standard Chartered leads the debt facility as global mandated lead arranger, with the IFC, FMO, RMB and First City Monument Bank acting as mandated lead arrangers and the core lender group. Loan draw-downs are expected to commence from May 2014 and should be concluded within three months.

It’s the first Nigerian power project to benefit from the World Bank’s partial risk guarantee structure. It also offers political risk insurance for equity and commercial debt from Miga.

Speaking at a summit in Abuja this week, Nigeria’s co-ordinating minister for the economy and minister of finance, Dr. Ngozi Okonjo-Iweala, said: “The completion of this transaction marks a major step forward in the power sector reform process with the creation of a strong and robust model for project financed power sector transactions. The strength of the model is evidenced by the level of investor interest in the project, with significant international capital now committed to the project following four years of hard work. I would like to congratulate the project developers and the funding partners for their commitment and dedication to instituting a world class process and structure for others to follow.”

Azura is owned by Amaya Capital Limited and American Capital Energy & Infrastructure, and the other sponsors contributing equity to the project include the Africa Infrastructure Investment Fund 2, Aldwych International, the Asset & Resource Management Company Ltd and FMO (the Dutch development finance company).

The project comprises a 450MW open cycle gas turbine power station; a short transmission line connecting the power plant to a local substation and a short underground gas pipeline connecting the power plant to the country’s main gas supply. It represents the first phase of a 1,500MW power plant facility. The plant’s location on the outskirts of Benin City is ideal because of its close proximity to Nigeria’s biggest gas distribution pipeline (which makes gas feedstock easily available) and its accessibility to the country’s high voltage transmission network (which facilitates the evacuation and distribution of power). The first phase of the plant, which is targeted to come on stream in 2017, is forecast to create over 1,000 jobs during its construction and operation.