BY GLORIA AKUDORO
The Nigeria Bulk Electricity Trading PLC (NBET) has closed the first tranche of its N4 trillion power sector bond programme, raising N501 billion in a landmark transaction aimed at restoring liquidity and strengthening financial stability across Nigeria’s electricity market.
The inaugural bond, issued through NBET Financial Company PLC (a Special Purpose Vehicle established
for this transaction) and fully guaranteed by the federal government signals renewed investor confidence in Nigeria’s power sector reform agenda.
A statement from NBET explained that the inaugural tranche comprised a N300 billion issuance to institutional investors including asset managers, banks, pension funds, and retail investors, alongside a N201 billion allocation to power generation companies (GenCos) that have signed the Settlement Agreement. The seven-year bonds, issued under a multi-instrument programme, aim to inject much-needed liquidity into the sector, enabling operators to stabilize operations and facilitate renewed investment.
According to NBET Acting Managing Director, Johnson Akinnawo, the successful close of the N501 billion represents a major step in resolving long-standing financial challenges in the power market. “This intervention will significantly improve liquidity across the value chain, enabling GenCos and distribution companies to operate more efficiently while supporting the country’s broader power sector reform objectives,” he said.
The bond issue was led by CardinalStone Partners Limited, a leading Investment banking firm in Nigeria, as lead financial adviser and issuing house, working closely with NBET and the Office of the Special Adviser on Energy. The transaction was further supported by key government authorities, including the Debt Management Office, Central Bank of Nigeria, Securities and Exchange Commission, and the Nigerian Electricity Regulatory Commission (NERC). Their collaboration ensured a smooth Settlement negotiations
and engagements with the Generation Companies including championing the PPSDRP initiative.
Further speaking, the Acting MD acknowledged the
support of all members of the Presidential Power Sector Debt Reduction Committee particularly the
Honorable Minister of Finance and 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 and Exchange Commissions, the National Pensions Commission,
Nigerian Revenue Service and the Nigerian Electricity Regulatory Commission (NERC) who facilitated
enhancements for the Bond Issue.
This tranche forms part of Phase 1 of the Power Sector Bond Programme, which is structured to strengthen the financial base of market participants and create a more sustainable foundation for electricity supply in the country.
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. It also reiterated commitment to market reforms aimed at enhancing the long-term financial viability of Nigeria’s electricity market.