Despite its pledge not to provide financing for hydrocarbon projects overseas, the UK government has joined the Nigerian firms to fund gas power plants. The British government through the British International Investment (BII), its Development Finance Institution (DFI), has invested $30 million in the Azura-Edo IPP, a 461MW open cycle gas turbine power station located near Benin City in Edo State, as debt finance support.
EnergyDay’s check revealed that, in December 2017, the power plant was integrated into the national grid and began producing electricity for distribution across the country through one of its gas turbines.
This was made known by the UK Government on Wednesday, through Nick O’Donohoe, the Chief Executive Officer, British International Investment, at a briefing in Lagos.
O’Donohoe said that the UK gave Management of the Azura Power Holdings the $30 million debt finance to help improve the capacity and operations of the power plant, which already contributes over 8% of electricity on the power grid.
While revealing that the finance was part of the $1 billion fund earmarked to be invested by the UK in Nigeria’s infrastructure, power and banking industries, O’Donohoe stated that the BII has invested $100 million in FirstBank; $75 million in Stanbic IBTC; $15 million in CardinalStone Capital Advisors and $162.5 million syndicated loan package in Access Bank.
The Azura-Edo power plant is owned by a private firm led by Actis Capital, an internationally reputed firm headquartered in London, with the Edo State government having a stake in the plant ownership.
Nigeria presently suffers pressing shortages in electricity supply. The unreliability of electricity supply negatively impacts economic growth and has compelled several businesses to run on generated with the current attendant high cost of their maintenance and purchasing fuel.
Improving the capacity of Azura can be a critical driver for the enhancement of power supply and the growth of the country’s economy. It will help add to current generation capacity, increasing the chances of a stable and reliable supply to Nigerians.