Afrigem Integrated Utilities Limited has entered into agreement with Geometric Power Limited to invest in the Aba Power project to bring it on stream and expand its generation capacity from 141 megawatts (mw) to 341mw by 2018.
Afrigem Utilities is a West African focused development and investment company. It assembled a consortium of technical and financial partners such as General Electric, Tuten Limited and NCL Limited, African Infrastructure Investment Managers, ARM-Harith Infrastructure Investment Limited, among other leading international Institutional Investors with exposure to Nigerian Infrastructure assets to participate in the project. The Afrigem Utilities consortium led by Mallam Samaila Zubairu as Vice Chairman and Mr. Daniel Mueller as Director, has agreed to make an initial investment of N15 billion in the project.
Diamond Bank Plc hosted the signing of the Transaction Implementation Agreement between the sponsors (Geometric Power Limited) and investors (Afrigem Utilities consortium) of the Aba power project.
According to its implementation plan, Afrigem Utilities has articulated a three-year value creation programme and will inaugurate the power plant in November with an output of 141mw and gradually grow it to 341mw by 2018.
The Chairman of Geometric Power Limited, Prof Bart Nnaji signed for the project sponsors while Mallam Samaila Zubairu, Vice Chairman of Afrigem Utilities signed on behalf of the Investors.
The creditors include Diamond Bank Plc, Asset Management Company of Nigeria (AMCON) and Stanbic IBTC Bank Plc.
In attendance were energy consultants, top bank executives and representatives of the various professional parties, namely Olaniwun Ajayi LP, the transaction counsel, Udo Udoma & Belo-Osagie Sponsor’s counsel, Templars, Creditors counsel and Afrinvest as financial advisers to the Sponsors.
Other professional parties to the deal include Sao Capital Limited as financial advisers to Afrigem Utilities, Allen & Overy as legal advisers, KPMG Advisory Services for financial/tax due diligence and PriceWaterhouseCoopers as tax advisers.
Nnaji said: “I would like to applaud everyone who helped to see this day come to pass. We are very happy that this project is on track and with this new investment we will bring power to the people of Aba and look forward the economic revival that this will bring to Nigeria.”
Zubairu emphasised the bankability of the integrated power project model as the template for growing capacity of reliable power supply which will accelerate Nigeria’s GDP growth, create jobs for youths.
“The integrated utility model with clear line of sight to cash flow and satisfied customers is the foundation for lighting up Nigeria and the rest of the ECOWAS region. Afrigem Utilities appreciates the invitation to be a partner of such a laudable initiative,” he added.
Wolemi Esan, Olaniwun Ajayi LP Partner and team lead for the transaction, said: “It has been a great honour representing Afrigem Integrated Utilities Limited on this market-defining transaction. Of the not less than 20 power transactions that we have had the privilege on working on in the last 24 months, we can confidently say that the acquisition of the Aba Integrated Power Project by Afrigem Utilities ranks very highly in terms of complexity, structure and innovation. By leveraging our strength and depth in Power, mergers and acquisitions (M&A), Corporate Rescue and Financing, we were able to assist in structuring and delivering this complex transaction successfully. We are particularly excited about the potential of this transaction to change the Nigerian power landscape, and indeed, the lives of ordinary Nigerians.”
Ike Chioke of Afrinvest, said: “We are delighted to act as financial adviser on this landmark deal. Given the inherently complex nature of this transaction, we must salute the resilience, doggedness and patriotism exhibited by Geometric and Afrigem Utilities, which has brought both companies together on this journey to transform the power sector in Nigeria.”
The Deputy Managing Director and Chief Risk Officer of Diamond Bank Plc, Caroline Anyanwu stated that the new agreement signals a huge economic leap in the generation and distribution of electricity energy in Nigeria. “I believe that the immense benefits that this new Transaction Implementation Agreement will bring will make Nigeria a better place especially as it will help boost economic output when the power plant starts generating power. We commend Geometric Power, StanbicIBTC, AMCON and others that have made this initiative work today; the partnership with Afrigem Utilities is a good one for the Creditors and Sponsors of Aba IPP and for growth in the Nigerian Electricity Supply Industry.”
Head, Strategic Accounts of AMCON, Kamilu Omokide stated that the entry of the new investor marks “beginning of greatness for the project and for Nigeria,” pointing out that the only panacea to Nigeria’s low production capacity is to allow the private sector to be the major drivers of the economy. The Company Secretary and Legal Adviser of StanbicIBTC, Angela Omo-Dare, noted that the new development is good for both the sponsor and the creditors.