The Fund for Export Development in Africa (FEDA), the development impact investment platform of African Export-Import Bank (Afreximbank) has announced that it has received internal approvals to acquire a strategic minority stake in Geregu Power Plc, subject to satisfactory diligence and documentation.

FEDA has the mandate of providing capital towards advancing intra-African trade, export development and industrialisation in Africa.

As part of its intervention efforts in the Africa’s energy sector, FEDA, in a statement, said it has made a strategic decision to support leading energy platforms across Africa, including the renewables and transition fuels sectors.

Geregu Power, one of Nigeria’s leading power generation companies with a capacity in excess of 430 megawatts, the statement said, is a highly strategic asset to realising Nigeria’s power sector roadmap.

FEDA noted that it 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.

The statement quoted Mr. Femi Otedola, the Chairman, Board of Directors, Geregu Power Plc, as stating that the deal underscored the organisation’s faith in the change that’s possible in the power sector in the country.

“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,” Otedola added.

President and Chairman of Afreximbank and Chairman of FEDA platform entities, Prof. Benedict Oramah, in his remarks, expressed delight with the planned move, explaining that without reliable power supply, the continent cannot achieve global competitiveness.

“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 industrialisation 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,” he stated.

Marlène Ngoyi, Chief Executive of FEDA, described that intervention as critical to boosting trade on the continent. “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,” Ngoyi said.

Geregu Power Plc thermal power plant is located in Ajaokuta, Kogi State, Nigeria and is listed on the Nigerian Stock Exchange. The plant now generates on average 10 per cent of Nigeria’s power.