More awards for Standard Bank

More awards for Standard Bank

Project Finance International, a leading project finance magazine, has awarded African Infrastructure Deal of the Year for the Lekki-Epe Expressway and African Power Deal of the Year for Rabai Power Project in Kenya, both of which involved Standard Bank in key roles.

The Lekki Project is a 30-year contract that involves the construction and operation of a toll road corridor along the Lekki peninsular of Lagos, Nigeria. (This area is considered the fastest growing residential and commercial land in Africa). The road is an approximately 50km strip of road that heads towards the east of Victoria Island.

Standard Bank Plc’s role in the landmark deal was as Lead Arranger, Underwriter, and largest lender to the project as well as the sole arranger of currency hedging. In addition The Standard Bank of South Africa (Project Finance) acted as Co-financial Advisor to the project.

Funding for the project, which should take three years to complete, comes from the Lagos State which has invested Naira N5bn (US$42 million) in a 20-year mezzanine tranche. The African Development Bank provided N10bn (USD85 million) senior debt over 15 years and local bank lenders provided a 12-year note facility of N9.4bn (US$80 million).

The remaining NGN 11bn (USD93 million) 15 year term funding was provided by Standard Bank Plc and onshore affiliate, Stanbic IBTC Plc.

“To source 15-year Naira in this climate is testament to a well structured and solid deal,” said Mike Waller from Standard Bank Plc. Standard Bank was able to use both its offshore and onshore Naira risk management platforms to structure the long-dated cross currency swap, allowing dollar funded institutions to participate.”

Commenting on the deal Rupert Boyd, Managing Director and Global Head of Distribution at Standard Bank said “This was possibly the highest profile transaction in Nigeria this year, given that the condition of the road directly affects the lives of millions of traffic-locked Lagosians.”

The 88.8MW Rabai IPP is a heavy fuel oil plant located near Mombasa in Kenya. With a national effective operating capacity of 1,100MW-1,150MW, the Rabai project will increase capacity by around 8% in Kenya. The current demand shortfall is being met by expensive high-speed diesel generators, which Rabai will phase out.

The sponsor group is Aldwych International and Burmeister and Wain Scandinavian Contractor and the ?112.8 million project is backed by ?79 million of senior debt and ?5.6 million of mezzanine debt.

The debt was arranged by Frontier Markets Fund Managers (FMFM) with FMO, Emerging Africa Infrastructure Fund (EAIF), DEG and Proparco providing the senior amount for 15 years at 350bp, with a two-year grace period, while EAIF and Proparco are adding the mezzanine debt at 750bp for 15 years with five-year grace period.

Commenting on this deal, Douglas Bennet from FMFM said: “This investment will give a significant boost to the Kenyan economy, while providing much needed new generating capacity to help reduce recent electricity rationing.

The fact that it was closed shortly after the political turmoil in Kenya at the start of 2008 and during the chaos of the Lehman collapse, is a testament to the dedication of all those involved with this project.”

Commenting further, Rupert Boyd said “Large scale investment in infrastructure is a critical factor in the growing African economies, in particular the availability of power on a consistent and affordable basis. The challenge is to structure transactions in ways that provide opportunities for investors while providing capital for these critical projects at sensible rates.

Both of these transactions illustrate Standard Bank’s capabilities in sourcing and structuring strong investments in Africa, and it is therefore very nice that the bank is recognised with these prestigious awards”.

Comments are closed.