The Federal Government has raised N501 billion from the domestic capital market underneath its Presidential Energy Sector Monetary Reforms Programme, with Africa Finance Company advising on the transaction. The bond issuance represents the primary tranche of a deliberate N4 trillion programme geared toward resolving long-standing money owed which have weighed on Nigeria’s electrical energy business for greater than a decade.
The issuance is designed to settle verified and overdue receivables owed to energy era corporations for electrical energy provided between February 2015 and March 2025. These unpaid obligations have created persistent liquidity stress throughout the facility sector. They’ve restricted the power of era corporations to service loans, preserve belongings, and put money into new capability.
Africa Finance Company acted as co-financial adviser alongside CardinalStone Companions. The programme is being carried out by NBET Finance Firm Plc, a particular goal car of the Nigerian Bulk Electrical energy Buying and selling Plc. Oversight is offered by the Presidential Energy Sector Debt Discount Committee, with technical management from the Workplace of the Particular Adviser to the President on Power.
Proceeds from the bond issuance shall be used to extinguish legacy claims owed to era corporations. That is anticipated to strengthen GenCos’ stability sheets and enhance money flows. The federal government believes it will cut back systemic danger within the electrical energy market and ease stress on banks with publicity to the sector.
Learn Extra: Africa Finance Corporation surpasses $1bn revenue for the first time – Businessday NG
For years, fee shortfalls and delayed remittances have undermined the monetary well being of the facility business. Many era corporations have relied on short-term borrowing to remain operational. Others have deferred essential upkeep, contributing to frequent outages and capability constraints.
The transaction obtained robust backing from home institutional traders. Pension fund directors accounted for about 50 % of whole subscriptions. Market members say this displays rising confidence in policy-backed infrastructure devices and the seek for long-dated naira belongings by pension funds.
Based on officers concerned within the programme, the bond issuance will not be a standalone intervention. It kinds a part of a broader reset of Nigeria’s electrical energy market. The reforms mix debt decision with monetary self-discipline and structural modifications throughout the worth chain.
When absolutely accomplished, the bond programme is anticipated to cowl about 5,398 megawatts of put in era capability. It should finalise settlement for greater than 290,000 gigawatt-hours of electrical energy billed since 2015. The influence shall be felt throughout corporations supplying energy to roughly 12 million registered clients nationwide.
The initiative additionally enhances ongoing investments in transmission infrastructure and accelerated shopper metering. The federal government is pushing a gradual transition in the direction of bilateral electrical energy buying and selling between wholesale counterparties. Pricing underneath this framework is anticipated to raised replicate market realities.
Collectively, these measures are geared toward correcting deep-seated monetary distortions within the energy sector. Policymakers consider a extra liquid and commercially viable electrical energy market is essential to supporting industrial growth, job creation, and long-term financial development
