CASE STUDY: Amandi Energy Goes Non-ECA Route on IPP Deal
Bonds & Loans
Published: 1 March 2017 04:31
The Amandi Energy Project was the only large scale base-load independent power generation project in sub-Saharan Africa to achieve financial close in 2016 and a strategically important project for the development of the country’s energy sector.
Amandi Energy Limited and the company’s owners – Endeavor Energy (Denham Capital), and Aldwych International – sought to raise long-term funding to back the development of a new 200 megawatt (MW) combined cycle, dual-fuel power project in Aboadze, Ghana.
Once complete, the US$552mn project will help Ghana’s meet its energy needs, boost the region’s economic productivity, and generate over 400 new jobs.
The US$572mn financing deal consisted of a US$134mn equity contribution from the project’s sponsors, including Endeavor, AFG, Aldwych, Pan African Infrastructure Development Fund 2 managed by Harith General Partners (PAIDF2), and ARM-Harith Infrastructure Fund (ARMHIF), and, a US$418mn in debt financing from OPIC and a number of commercial lenders.
CDC Group provided a US$82.9mn facility for the deal, with RMB and Nedbank kicking in US$84.7mn in addition to a Letter of Credit Facility amounting to US$20.0mn. These facilities carry tenors of 15 years.
OPIC, the US government’s development finance institution, provided a US$250.0mn 18-year facility for the project. The facility is OPIC’s largest single investment in West Africa to date.
Amandi Energy will sell power to the Electricity Company of Ghana (ECG) under a 25-year Power Purchase Agreement. It will be initially fuelled by light crude oil, but is expected to switch to domestic gas supplied from Ghana’s offshore Sankofa natural gas field once available, the company said.
The project sponsors and lenders adopted an innovative finance structure in which the commercial lenders received non-ECA and non-MIGA political risk cover (a rare move for a project of this scale) arranged by two US-based commercial political risk insurers and supported by OPIC PRI reinsurance.
Overall, the Amandi Energy project is the only large scale base-load independent power generation project in sub-Saharan Africa to achieve financial close to date in 2016, and a crucial step forward for the country in meeting its growing energy needs.
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