The Emerging Africa Infrastructure Fund (EAIF) has committed US$15-million of senior secured debt to Tower Power Abeokuta Limited to facilitate the construction of a 12MW gas-fired combined heat and power station in Abeokuta, Nigeria.
Construction is scheduled to be undertaken throughout 2011 and full combined cycle operations are expected to begin in January 2012. The generated power will be sold under long term Power Purchase Agreements to industrial offtakers in the area. The project is to operate on full utilisation of waste heat with thermal efficiencies approaching the best of class, delivering significant economic and environmental benefits.
The project is promoted by Industrial Energy Africa Limited, an industrial energy groupactive throughout Africa in clean and renewable energy solutions. The Engineering. Procurement and Construction (EPC) contract is being executed by Gentec Energy PLC, a leading UK EPC contract with significant Nigerian expertise. Gentec is part of Powergas International Ltd, a group of EPC contractors, equipment suppliers and service organisations with a growing presence in clean energy.
Under the Tower Power brand, the promotors intend to replicate this model throughout Nigeria and have five similar power plants under development. The project will utilise Nigerian gas and consequently reduce gas flaring. The facility is more environmentally friendly than many other power-station due to its heat recovery mechanism.
Nick Rouse, Managing Director Frontier Markets Fund Managers, said "The Tower Power Abeokuta project shows the viability of private power generation in Nigeria. We are pleased that the Project will exploit Nigeria's natural gas resources for domestic use and will provide reliable and cost-efficient power to industrial users.
"Nigeria has a substantial deficit in power supply. Reliable electricity supply, which is key to industrial growth and operations, is difficult to find and the construction of Tower Power Abeokuta Limited will help to alleviate the power supply shortage in Abeokuta."
The Emerging Africa Infrastructure Fund is a public private partnership able toprovide long-term USD or EUR-denominated debt or mezzanine finance on commercial terms to finance the construction and development of private infrastructure in 47 countries across sub-Saharan Africa. EAIF is able to provide between US$-10-million to US$-36.5-million (or its equivalent in EUR) to projects across a wide range of sectors including telecoms, transport, water and power, amongst others.
Emerging Africa Infrastructure Fund is advised by Frontier Markets Fund Managers Limited, which is in turn advised by the Frontier Markets Fund Managers, a division of Standard Bank Plc, which is authorised and regulated by the Financial Services Authority.
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