The Fund for Export Development in Africa (FEDA), an African Export-Import Bank (Afreximbank) development impact investment platform, has received internal approval to acquire a minority stake in Geregu Power, a power-generation company majority owned by Nigerian billionaire Femi Otedola.
The acquisition represents a significant move for both Nigeria’s energy sector and Africa’s overall industrialization and trade. The move is part of FEDA’s efforts to support Africa’s energy sector, including renewables and transition fuels.
Geregu Power, which has a capacity of more than 430 megawatts, plays an important role in Nigeria’s power sector. Its expansion will be supported by FEDA as a minority investor, as the Afreximbank’s development impact investment platform has the mandate to provide capital to advance intra-African trade, export development, and industrialization on the continent.
Femi Otedola, chairman of the board of Geregu Power, expressed excitement at the investment, stating that it is a testament to the company’s long-term strategic plans and will help accelerate expansion into the wider West African market.
“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,” Otedola said.
“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 added.
Benedict Oramah, president and chairman of Afreximbank and chairman of FEDA, also commented on the investment, stating that it is a crucial step towards supporting Nigeria’s power sector and advancing Africa’s industrialization and energy security. Marlene Ngoyi, CEO of FEDA, emphasized the importance of the investment in driving the structural transformation of 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,” Marlene Ngoyi said.
Geregu Power is majority owned and operated by Amperion Power Distribution Company, which is owned by Otedola. The company operates three natural gas-fired units with an installed capacity of 435 MW, and its power plant generates 10 percent of Nigeria’s power. The expansion of Geregu Power will be crucial in meeting the growing demand for electricity in the country.
Three months ago, Geregu listed its shares on the NGX at a price of N100 ($0.231) per share, giving it a market capitalization on the local bourse of N250 billion ($579 million).
Since then, retail investors, investment banks, and hedge funds have continued to buy into the power company, and its shares have increased by more than 15 percent, returning millions of dollars in gains to shareholders, including Otedola, who owns a majority stake in the firm.
