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AFC Co-Arranges USD 215 million Financing for Transcorp’s Ughelli Power Plc

AFC Co-Arranges USD 215 million Nigerian Power Privatisation Acquisition Financing for Transcorp’s Ughelli Power Plc
Africa Finance Corporation (AFC) in conjunction with UBA Bank Plc, as co-arrangers, and FCMB and Fidelity Bank as co-financiers has provided a USD 215 million debt financing facility for the acquisition of Ughelli Power Plc. The aggregate commitment of AFC for the acquisition is USD55 million.

Nigeria commenced restructuring and reform of its electricity sector in 2000 with the issuance of the National Electric Power Policy (NEPP) to unbundle the sector and establish a regulator, with a mandate to create and develop a competitive electricity market. The provisions of the NEPP were subsequently enacted in the Electric Power Sector Reform Act 2005 (EPSR Act), providing the key legal and regulatory framework for the reform, including the establishment of the Nigeria Electricity Regulatory Commission, paving the way for private sector participation in the power sector. Ughelli Power Plc is one of six power generation limited liability companies established under the provisions of the EPSR Act following the unbundling of the vertically integrated PHCN.

Ughelli Power Plc is a gas fired thermal power plant acquired by Transnational Corporation of Nigeria Plc (Transcorp) in the first round of the Federal Government of Nigeria’s privatisation of power generation assets formerly owned by the Power Holding Company of Nigeria (PHCN). Ughelli Power Plc was incorporated in 2005, is situated in Delta State and has an installed capacity of approximately 900MW. It currently generates approximately 8% of the total electricity within the Nigerian national grid.

Transcorp is the lead sponsor in the Transcorp Ughelli Power consortium, which will be purchasing 100% of the shares in Ughelli Power Plc. Transcorp, incorporated in 2004, is a diversified conglomerate with strategic investments and core interests in the hospitality, agribusiness and energy sectors.

AFC, a multilateral finance institution, was established in 2007 and has a current capital base of US$1.2 billion. It was established to be the catalyst for private sector infrastructure investment across Africa. AFC fills a critical void in providing project structuring expertise and risk capital to address Africa’s infrastructure development needs, and is increasingly being seen as the benchmark institution for private sector investment in the core infrastructure sectors of power, natural resources, heavy industry, transport, and telecommunications.

Andrew Alli, President & Chief Executive Officer of the Africa Finance Corporation, stated “AFC’s long term vision is to help address Africa’s infrastructure deficit and ensure sustainable economic growth for the continent. Growth of the Nigerian economy cannot be fully realised without an efficient and functioning power sector. Power is one of AFC’s high priority sectors for investment, and arguably Africa’s most significant need.
To this end AFC stands as both an advocate and support of privatisation of the power sector in Nigeria, and has partnered with the US Government through USAID in the USD7 billion US Presidential “Power Africa Initiative” to accelerate investment in Africa’s power sector over the next five years and increase access to clean, geothermal, hydro, wind and solar energy. AFC’s investment in Ughelli power will contribute towards reducing Nigeria’s chronic power deficit, foster economic growth and create employment.

AFC was created to address the infrastructure investment deficit and is privileged to be providing an African private sector investment solution, to drive economic growth and industrial development in Nigeria.”

About AFC - www.africafc.org
AFC is an African-led international financial institution, established in 2007 whose mission is to improve African economies by proactively developing and financing infrastructure, industrial and financial assets. AFC is involved as an investor, developer and financier of various infrastructure projects, and is gaining recognition as the benchmark institution for financing the development of infrastructure projects in Africa.

AFC is the lead investor in the award winning Cabeolica project, a USD90 million, 26MW landmark renewable energy wind power project in Cape Verde. AFC is the Technical Adviser to the Central Bank of Nigeria (CBN) on the CBN’s USD2.0 billion Power and Aviation Intervention Fund (PAIF). AFC is a partner with Vigeo Holdings Limited and Tata Power Delhi Distribution Limited for the acquisition of power distribution assets, and a lead investor in the Kainji Power generation plant in the current Nigerian Government power sector privatisation round. Additionally in Nigeria, AFC made investments to support marginal field operators in the up and mid-stream oil and gas sector companies such as Neconde, FHN and Seven Energy. AFC is also the lead investor in Cenpower Generation Company Limited (Cenpower), which is implementing the Kpone IPP project – a 340 megawatt combined cycle gas turbine power plant in Tema, Ghana. AFC is the lead investor in the Main One fibre optic cable project, enhancing West Africa’s connection to Europe and the rest of the world through faster and more technologically advanced broadband capacity. AFC provided a USD50 million convertible debt investment in ARM Cement Limited (ARM), the second largest cement operator in Kenya to support expansion initiatives across Eastern and Southern Africa including; development and construction of a lime plant in Tanzania and expansion of ARM’s cement capacity in Kenya. The transaction marked AFC’s first bilateral investment in Kenya. AFC provided financing for Ethiopian airlines fleet expansion in the acquisition of Africa’s first Boeing 777 airline. AFC also invested in the Bakwena toll road project in South Africa and the EURO 270 million Konan Bedie Toll bridge in Côte d’Ivoire, the landmark transport Public Private Partnership (PPP) project in Francophone Africa, underscoring its interest in investing in PPPs/PFIs in its focal sectors across the African continent. AFC has launched a landmark USD15 million project development facility with the Dutch Development Bank FMO, to fund early-stage equity investments in projects under development pre-financial close, in the infrastructure sector across sub-Saharan Africa.

To execute its mandate, AFC has established partnerships regionally, with other institutions such as the African Development Bank, African Export-Import Bank PTA Bank, Islamic Development Bank, Banque Ouest Africaine de Développement (BOAD), the Nigerian Sovereign Investment Authority (NSIA); and Internationally with the China Africa Fund, the Infrastructure Development Finance Company of India (IDFC), FMO, The Dutch Development Bank, and the US Government through USAID in the USD7 billion US Presidential “Power Africa Initiative
 

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