₦501bn bond, to resolve liquidity challenge in power sector, says NBET

By Onu Okorie 

The Acting Managing Director of Nigeria Bulk Electricity Trading PLC NBET, Mr. Johnson Akinnawo has said that the 
successful close of the ₦501 billion bond, the first tranche under the N4,000,000,000,000 Power Sector Multi-Instrument Issuance Programme,

represents a major step forward in resolving the long-standing liquidity
challenge that has constrained the power sector for years. He made this known in a statement made available to the media recently in Abuja.

According to him, “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  NBET Plc recently announced the successful closure of the first tranche under the N4,000,000,000,000 Power Sector Multi-Instrument Issuance Programme. 

The inaugural bond issue of N501,021,000,000 bond comprises a fully subscribed N300,000,000,000 bond issuance to the market (Asset Managers, Banks, Pension Funds and Retail Investors) and N201,021,000,000 bond issued to Power Generation Companies (GenCos) that have signed Settlement Agreement.
The seven year bonds which were issued by NBET Finance Company PLC (a Special Purpose Vehicle established
for this transaction) are fully guaranteed by the full faith and credit of the Federal Government of Nigeria.
The successful completion of this inaugural tranche marks a critical milestone in the implementation of the
Programme and reflects strong market confidence in the Government’s reform agenda for the power sector.

CardinalStone Partners Limited, a leading Investment banking firm in Nigeria, led the consortium of
appointed professional parties as Lead Financial Adviser and Lead Issuing House to successfully execute the
N501,021,000,000 Series 1 Bond Issue working closely with the Nigerian Bulk Electricity Trading Plc that acted as Sponsor on the Transaction and the Office of the SA Energy that led the Settlement negotiations and engagements with the Generation Companies including championing the PPSDRP initiative.

In addition to the professional advisers, the Acting Managing Director of NBET further acknowledged the
support of all members of the Presidential Power Sector Debt Reduction Committee particularly the
 Minister of Finance & Coordinating Minister of Economy, Mr. Wale Edun, whose 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 Commissions, the National Pensions Commission,
Nigerian Revenue Service and the Nigerian Electricity Regulatory Commission who facilitated
enhancements for the Bond Issue.
These settlements form part of Phase 1 of the Programme, which is designed to restore liquidity to the power sector, strengthen the balance sheets of critical market participants and to create a more sustainable foundation for electricity supply in Nigeria.

He added that NBET remains committed 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. NBET reaffirmed its commitment to market reforms aimed at enhancing the long-term financial viability of Nigeria’s electricity market.