Benin Power Station Project receives funding
Private Infrastructure Development Group (PIDG) company, the Emerging Africa Infrastructure Fund (EAIF), announced on 27th July that it is progressing its due diligence as the sole lender to a €36 million, 25-MW natural gas-fuelled power station project, to be built by the Nigerian company, Genesis Holdings, at Maria Gleta, near Benin’s capital of Porto Novo. EAIF is providing €27 million of long-term debt. Financial close is expected in Q1 2021, with construction forecast to begin shortly afterwards. The project is EAIF’s first in Benin.
A key element in helping to assess the financial viability and bankability of the project is a returnable grant of US$ 449,250 provided by PIDG Technical Assistance. It funds part of the development expenses that were mainly financed by Genesis. The PIDG funds also helps meet the cost of the rigorous due diligence process that is required on all projects seeking support from PIDG and its companies.
Emilio Cattaneo, Head of Technical Assistance at PIDG TA, says, “Early stage financial support not only helps make infrastructure projects more viable, but also strengthens investor confidence at the project financing stage.”
Akinwole Omoboriowo II, Chairman Board of Directors of Genesis Holdings, says; “EAIF brought us its very deep knowledge of financing power stations across Africa and introduced us to PIDG Technical Assistance. The help we received there gave our business modelling and projections strong foundations, adding to EAIF’s confidence in the project.”
Akinwole Omoboriowo went to thank the Government of Benin, which he says has created a welcoming investment climate and is committed to growing Benin’s power generation sector and delivering better energy security.
GENESIS’ co-development partner and an equity investor in the Maria Gleta project is the Johannesburg-based Pembani Remgro Infrastructure Fund (PRIF). PRIF is an equity investor across Africa in infrastructure projects and allied businesses. GENESIS says that PRIF has made a key strategic contribution to accelerating achieving a strong financial foundation and corporate structure for the project.
Ravi Kalaichelvan, an investment director at PRIF says; “We are pleased to partner GENESIS and EAIF in the Maria Gleta development. It will be an asset that will further aid the sustainable growth of Republic of Benin.”
Roland Jannsens, a director at EAIF’s managers, Ninety One, says “EAIF is a patient lender that understands the time and great efforts needed to transform lives and economies. We are delighted that EAIF and PIDG Technical Assistance have been at the center of bringing Benin and its people new infrastructure that will help create a more competitive economy for the country.”
Increasing Benin’s base load generating capacity will significantly improve the country’s ability to attract investment from local entrepreneurs and internationally mobile capital. Independent data shows that some 42% of the 11.5 million people of Benin have access to electricity. Ongoing investment in uniting the transmission lines of the electricity grids in north and south Benin and linking it to neighboring countries is a factor in promoting investment in the generation sector. [Classified as a low-income country, Benin is ranked 163rd out of 189 on the 2019 UNDP Human Development Index, up three places since 2015.