The Nigerian Bulk Electricity Trading Plc (NBET) has completed the first tranche of its ₦4 trillion Power Sector Multi-Instrument Issuance Programme, marking a major milestone in resolving longstanding liquidity challenges in Nigeria’s electricity market.
NBET says the tranche comprises a fully subscribed ₦300 billion bond offered to the capital market attracting asset managers, banks, pension funds and retail investors and an additional ₦201.021 billion bond issued to Power Generation Companies (GenCos) that have executed the Settlement Agreement.
The seven-year bonds were issued through NBET Finance Company Plc, a Special Purpose Vehicle created for the transaction, and are fully guaranteed by the full faith and credit of the Federal Government of Nigeria.
Restoring Stability
NBET described the successful issuance as a strong vote of confidence in the Federal Government’s power sector reform agenda and a critical step toward restoring stability across the electricity value chain.
Commenting on the development, the Acting Managing Director of NBET, Mr. Johnson Akinnawo, said the bond issuance represents a breakthrough for the sector.
Accessing to him, “the successful close of the ₦501 billion bond represents a major step forward in resolving the long-standing challenges that have constrained the power sector for years”
“This intervention will significantly improve liquidity across the value chain, enable operators to stabilise their operations, and support renewed investment in the Nigerian power sector,” he explained.
He said the transaction was led by CardinalStone Partners Limited, which served as Lead Financial Adviser and Lead Issuing House.
“The firm worked alongside NBET as transaction sponsor and the Office of the Special Adviser to the President on Energy, which led settlement negotiations with Generation Companies and championed the Presidential Power Sector Debt Reduction Programme (PPSDRP).”
Mr. Akinnawo also acknowledged the contributions of members of the Presidential Power Sector Debt Reduction Committee, particularly the Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, whose leadership he described as instrumental to the success of the capital raise.
He further commended the roles played by key government institutions and regulators, including the Debt Management Office (DMO), Central Bank of Nigeria (CBN), Securities and Exchange Commission (SEC), National Pension Commission (PenCom), Federal Inland Revenue Service (FIRS) and the Nigerian Electricity Regulatory Commission (NERC), for facilitating regulatory enhancements that supported the bond issuance.
According to NBET, the settlements under the first tranche form part of Phase 1 of the Programme, which aims to restore liquidity, strengthen the balance sheets of critical market participants and lay a more sustainable foundation for electricity supply in Nigeria.
NBET reaffirmed its commitment to transparency and efficiency in the deployment of proceeds and pledged continued collaboration with the Federal Government, market participants and transaction advisers to achieve the objectives of the Presidential Power Sector Debt Reduction Programme and enhance the long-term financial viability of Nigeria’s electricity market.
Lateefah Ibrahim