115
By Daniel Adaji
Nigeria’s power sector received a major financial boost on Tuesday as the Nigerian Bulk Electricity Trading Plc (NBET) successfully closed the first tranche of its N4 trillion Power Sector Multi-Instrument Issuance Programme, raising N501 billion in the process.
The inaugural bond issue comprised a fully subscribed N300 billion bond sold to the market, including asset managers, banks, pension funds, and retail investors, and N201,021,000,000 issued to power generation companies (GenCos) that have signed the Settlement Agreement.
The seven-year bonds were issued by NBET Finance Company PLC, a special purpose vehicle established for the transaction, and are fully guaranteed by the full faith and credit of the Federal Government of Nigeria.
Commenting on the milestone, NBET’s Acting Managing Director, Mr. Johnson Akinnawo, said, “The successful close of the N501 billion bond represents a major step forward in resolving the long-standing challenge that has constrained the power sector for years. This intervention will significantly improve liquidity across the value chain, enable operators to stabilize their operations and support renewed investment in the Nigerian Power Sector.”
The bond issue, led by CardinalStone Partners Limited as Lead Financial Adviser and Lead Issuing House, marks a critical step in the implementation of the programme and reflects strong market confidence in the government’s power sector reform agenda.
The initiative was supported by the Office of the Special Adviser on Energy, which coordinated settlement negotiations with generation companies and championed the Presidential Power Sector Debt Reduction Programme (PPSDRP).
NBET acknowledged the role of all members of the Presidential Power Sector Debt Reduction Committee, particularly the Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun. “His leadership and support provided the bedrock for this success, and all who played vital roles in making this capital raise a success, all key power sector stakeholders as well as government authorities like the Debt Management Office, Central Bank of Nigeria, the Securities & Exchange Commission, the National Pensions Commission, Nigerian Revenue Service and the Nigerian Electricity Regulatory Commission who facilitated enhancements for the Bond Issue,” he said.
Phase 1 of the programme is designed to restore liquidity to the power sector, strengthen the balance sheets of critical market participants, and create a more sustainable foundation for electricity supply in Nigeria.
NBET reaffirmed its commitment to working closely with the federal government, market participants, and transaction advisers to ensure “the transparent and efficient deployment of proceeds in line with the objectives of the Presidential Power Sector Debt Reduction Programme.”
The successful bond issuance is expected to stabilise operations across the electricity value chain, increase investor confidence, and support the long-term viability of Nigeria’s electricity market.