The African Export-Import Bank’s (Afreximbank) Fund for Export Development in Africa (FEDA) has announced that it has received internal approvals to acquire a strategic minority stake in Geregu Power Plc.
FEDA is the development impact investment platform of Afreximbank with the mandate of providing capital towards advancing intra-African trade, export development and industrialization in Africa.
As part of its intervention efforts in the Africa’s energy sector, FEDA has made a strategic decision to support leading energy platforms across Africa, including the renewables and transition fuels sectors, according to a statement on Tuesday.
It described Geregu Power as one of Nigeria’s leading power generation companies with a capacity in excess of 430 megawatts and a highly strategic asset to realising the country’s power sector roadmap.
According to the statement, FEDA aims to support the business as a minority investor and work with the current owners and management team to drive the expansion of the business over the next few years.
Commenting on the deal, Femi Otedola, chairman, Board of Directors, Geregu Power, said: “As the pioneer power generation company on the Nigerian Exchange Limited (NGX), the interest shown by FEDA, is an expression of its firm belief not only in the Company but also in the future of the Nigerian Electricity Supply Industry.
“in a period of contracting economic activity globally, to attract this investment from FEDA is testament to our long-term strategic plans and will accelerate our expansion to the wider West African Market.”
On his part, Benedict Oramah, president and chairman of Afreximbank and chairman of FEDA platform entities, said: “We are very pleased with this proposed investment, which marks a critical step towards supporting Nigeria’s power sector, and more broadly, towards advancing Africa’s industrialization and energy security.
“Without adequate power, Africa cannot achieve global export competitiveness. Afreximbank and its subsidiaries, including FEDA, are focused on creating a level playing field so that African products can compete at near equal footing with those originating from other markets. We hope that this approved investment will take us closer towards that goal.”
Marlène Ngoyi, CEO of FEDA, said the proposed investment in Geregu Power demonstrates FEDA’s ability to intervene in opportunities and sectors that are critical towards driving the structural transformation of trade on the continent.
“Geregu Power is a key player in Nigeria’s power sector. FEDA is pleased to partner with the Company in its next phase of growth.”
Geregu Power Plc is a 435MW thermal power plant located in Ajaokuta, Kogi State, Nigeria and is listed on the NGX. The plant is majority owned and operated by Amperion Power Distribution Company Limited. The power plant consists of three simple cycle natural gas fired Siemens V94.2 STG5-2000E gas turbine generator units with a 435MW Installed Capacity. The Turbine units are GT11, GT12, and GT13 and each is designed to produce 145 MW at 15.75KV, stepped up to 330kV via a 173.6MVA Power Transformer and now generates on average 10 percent of Nigeria’s power.
Headquartered in Kigali, Rwanda, FEDA is the impact investment subsidiary of Afreximbank. FEDA was set up to provide equity, quasi-equity, and long-term equity-like debt capital to finance the multi-billion-dollar funding gap (particularly in equity) needed to transform the trade sector in Africa. FEDA pursues a multi-sector investment strategy along the intra-African trade, value-added export development, and manufacturing value chains, which includes financial services, technology, consumer and retail goods, manufacturing, transport, power & logistics, agribusiness, as well as ancillary trade enabling infrastructure such as industrial parks.