This Practice Note considers the meaning of the term “structure” in a project finance transaction and identifies the key issues that may inform the approach to structuring such a transaction. It explains a “plain vanilla” project finance structure and then contrasts that with some of the innovations employed in the Azura Edo IPP project, a conventional power project in Nigeria. This Practice Note was produced by Julian Nichol at Akin Gump Strauss Hauer & Feld, who has experience in the EMEA project finance markets and who advised emerging markets investor Actis on its acquisition of a majority stake in the Azura Edo IPP post financial close.

1. Introduction to project finance structures -

This Practice Note (i) considers what is meant by “structure” in the context of a project finance transaction and identifies key issues that inform the approach to structuring a project finance transaction, and (ii) looks closely at the Azura Edo independent power project in Nigeria (“Azura Edo IPP”) as a case study to help identify and explain a number of recent and innovative project finance structuring solutions that have been successfully implemented in order to overcome certain identified risks and challenges. This Practice Note is not intended to be a general introduction to project finance and therefore assumes a basic familiarity with its concepts (see Practice Note: Introduction to Project Finance).