Geregu Power, controlled by the business tycoon Femi Otedola, is a 435 megawatt thermal power plant located in Ajaokuta, Kogi State.
The Fund for Export Development in Africa (FEDA), a unit of African Export-Import Bank (Afreximbank), says it has received approval from its internal approving authority to acquire a minority stake in Geregu Power Plc.
Geregu Power, controlled by the business tycoon Femi Otedola, is a 435 megawatt thermal power plant located in Ajaokuta, Kogi State, and is listed on the Nigerian Exchange.
FEDA, based in Kigali, is the development impact investment platform of Afreximbank with the mandate of providing capital towards advancing intra-African trade, export development and industrialisation in Africa.
The approval was disclosed in a statement on Friday on Afreximbank's website.
"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," the statement said.
"Geregu Power, one of Nigeria's leading power generation companies with a capacity in excess of 430 megawatts, is a highly strategic asset to realising Nigeria's power sector roadmap."
It said 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.
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According to the statement, the chairman of Geregu's Board of Directors, Femi Otedola, 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 (NESI)."
"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," he said.
The statement also quoted the president and chairman of Afreximbank and Chairman of FEDA platform entities, Benedict Oramah, as saying:
"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."
Also, CEO of FEDA, Marlène Ngoyi, 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," She said.
