ARM-Harith Infrastructure Investment Limited (ARMHIIL), manager of the ARM-Harith Infrastructure Fund (ARMHIF), has announced ARMHIF’s investment in Amandi IPP in Ghana.
Consequently, the company said it has commenced construction of the $552 million Amandi Energy Power Plant, a 200 megawatt (MW) combined cycle, dual-fuel power project in Aboadze, Ghana.
Amandi Energy Limited, said in a statement that Amandi IPP is the only large scale base-load independent power generation project in sub-Saharan Africa that has achieved financial close so far in 2016.
The Amandi Project, it stated, will be crucial in helping meet Ghana’s growing power needs.
“Once constructed, the plant will be one of the most efficient power plants in the country and will produce more than 1,600 gigawatt hours per year, energising up to one million Ghanaian households. The $552 million investment required for the Amandi Project comprises $134 million in equity from the sponsor group, which includes Endeavor Energy, Amandi Founder Group, Aldwych International, Pan African Infrastructure Development Fund 2 (PAIDF2) managed by Harith General Partners, and ARMHIF.
“The $418 million in debt financing is provided by a group of lenders, including the U.S. Government’s development finance institution, Overseas Private Investment Corporation (OPIC), which will provide a $250 million loan; CDC Group plc, which will provide an $83 million loan; as well as Nedbank Limited and Rand Merchant Bank, “it stated.
It added: “Taken together with the $868 million Azura-Edo IPP in Nigeria, for which financial close was successfully achieved around this same time last year, ARMHIF is now invested in two significant power assets that give further credence to the Fund’s West Africa strategy. ARMHIF, through these two investments, has successfully helped close $1.42 billion of infrastructure projects in West Africa to date. ARMHIF has a robust pipeline of further deals under development, including a 100MW Solar Power IPP under development for Northern Nigeria. Through the smart deployment of capital and management of infrastructure assets, ARMHIF aims to make, in a profitable way for investors, a solid contribution to improving infrastructure in West Africa, and Nigeria.”
ARMHIIL Managing Director/CEO, Opuiyo Oforiokuma, commented: “We appreciate the confidence and support of our investors, especially the pioneering Nigerian Pension Fund investors in ARMHIF who were the first Pension Funds in Nigeria to commit to an Infrastructure Fund. We see from examples around the world, and now in Nigeria, that Pension funds are a viable source of funding for infrastructure. As the main source of long term institutional savings in Nigeria today, valued at approximately $25 billion, our Pension Funds are ideally suited to the long-term investment horizons over which infrastructure projects are typically implemented.”
On the future prospects for infrastructure financing in Nigeria, he explained that the size of Nigeria’s infrastructure deficit is so large as to continuously challenge stakeholders on how to raise capital for much needed projects. “It is important that we closed the Azura-Edo IPP transaction about this same time last year. This showed that well-structured and economically viable projects can attract large scale financing in Nigeria”, he stressed.
Furthermore, he noted that the economic environment in Nigeria has become more challenging since then, adding however that there is still some local and international interest to invest in Nigeria albeit cautiously so.
He added: “Should essential reforms in key areas of the country’s economic policies be made, we believe that the prospects for infrastructure investment in Nigeria this year and beyond will be enhanced. Construction of the Amandi IPP will commence in the New Year, with power scheduled to go into supply in 2019. The Azura-Edo IPP, on the other hand, has been under construction throughout 2016 and the plant is scheduled to deliver power into supply in 2018.”
ARMHIF is a closed-ended specialist Infrastructure Fund established by Asset & Resource Management Company Ltd of Nigeria (ARM), and Harith General Partners Proprietary Limited of South Africa (Harith), and invests equity in transport, energy, and utilities infrastructure projects across West Africa. First close of the Fund was achieved in January 2015, with investment commitments received from the African Development Bank, ARM, Harith, Nigerian Pension Funds, a family office, and the Fund Management Team, amongst others. ARMHIF is the first Private Equity Infrastructure Fund registered and approved by the SEC under its new rules for such vehicles, as well as the first in which Nigerian Pension Funds have made investment commitments.