Century of Nigeria to Raise $700 Million for Gas-Power Plant

Apr 03, 2014 1:03 pm ET

(Updates with funding for first phase in first and fifth paragraphs.)

April 3 (Bloomberg) -- Century Power Generation Ltd., a Nigerian energy company, plans to raise $700 million to finance the first phase of a 1,500-megawatt power plant, Chief Executive Officer Chukwueloka Umeh said.

Standard Chartered Plc, based in London, and Diamond Bank Plc, based in Lagos, will lead the financing process expected to be concluded by the end of this year, Umeh said in a March 31 interview. The African Development Bank is providing a partial- risk guarantee as “the global arranger,” he said.

“We’re working with a typical split of 70 percent debt and 30 percent equity,” said Umeh. “We expect that by the end of 2016, we should be commissioning the first phase of the plant.”

Nigeria, beset by frequent blackouts, wants to boost its current electricity output of about 4,000 megawatts to 20,000 megawatts by 2016, according to Sam Amadi, chairman of the Nigerian Electricity Regulatory Commission. Nigeria is Africa’s biggest oil producer and most populous country with about 170 million people.

General Electric Co. and Daewoo Engineering & Construction Co. will start building the gas-fired plant in Okija in Anambra state, close to the southeastern commercial centers of Onitsha and Nnewi, as soon as the company seals the financing deal. Starting from an initial 495 megawatts, the plant is expected to run at its full capacity of 1,500 megawatts by 2020, according to Umeh.

Standard Chartered didn’t immediately respond to e-mails and telephone messages to its London office seeking comment. Diamond Bank didn’t immediately respond to e-mailed questions for comment.

Century Power is a unit of Nestoil Plc, a Nigerian company providing engineering, procurement and construction services to energy companies. Its assets include part ownership of Oil Mining Lease 42, estimated to have gas reserves of more than 5 trillion cubic feet. That is enough to produce 2,500 megawatts daily for more than 25 years, according to Umeh.

The company plans to add an additional three power plants to generate a total of 5,000 megawatts within the next six years, he said. “We are investing across the value chain, from gas production to gas transport, and transmission lines.”

--With assistance from Elisha Bala-Gbogbo in Abuja.