AES Nigeria Barge Limited

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In January 2001, Nigerian unit of power company AES Corporation acquired a majority interest in Enron Corporation's barge-mounted electric power plant in Lagos. The conception of the independent power producer was as a result of contacts by the Lagos State Government with the United States-based power company, ENRON Group. However, the postponement in the commencement of operation was attributed to the process of sorting out the loose ends of the memorandum of understanding between ENRON, Lagos state government, NEPA, and the Federal Ministry of Power and Steel. Later, it was explained that the delay was caused by the process of converting the American circle system on the imported barges to the Nigerian system. The total investment in the business was $240 million. Generation consisted of 9 barge-mounted combustion turbines with a total net output of 270MW. the power plant began commercial operation in September 2001. AES is both manager of construction and plant operator. Electricity from the plant was supplied to National Electric Power Authority (NEPA) under a 13.25-year power purchase agreement. In June 2001, The Overseas Private Investment Corporation (OPIC) approved a $200 million political risk insurance program for the construction of the barge-mounted power plant. The insurance provides currency inconvertibility, expropriation, and political violence coverage with respect to AES's investment in AES Nigeria Barge Limited. In September 2004, the Nigerian subsidiary of AES completed a non-recourse project finance transaction for the power plant. The $120 million financing was funded from a consortium of four commercial banks and three development finance institutions. The development financial institutions were FMO (Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden N.V.), African Export-Import Bank, and DEG (Deutsche Investitions und Entwicklungsgesellschaft mbH). The commercial banks were Africa Merchant Bank (France), a division of Belgolaise Bank, United Bank for Africa (Nigeria), Rand Merchant Bank (South Africa), and Diamond Bank (Nigeria). None None