KEY POINTS
- NBET Finance Company PLC has listed two seven-year fixed-rate bonds worth a combined ₦728.98 billion on FMDQ Exchange.
- The bonds comprise a ₦402 billion Series 2 Tranche A and a ₦326.98 billion Series 2 Tranche B.
- Proceeds will be used to settle outstanding legacy debts owed to electricity generation companies.
- The issuance is part of NBET’s ₦4 trillion Multi-Instrument Issuance Programme.
MAIN STORY
NBET Finance Company PLC has listed ₦728.98 billion in seven-year fixed-rate bonds on FMDQ Securities Exchange Limited to raise long-term funding for settling outstanding debts owed to electricity generation companies (GenCos).
The bonds comprise a ₦402 billion Series 2 Tranche A and a ₦326.98 billion Series 2 Tranche B, issued under the company’s ₦4 trillion Multi-Instrument Issuance Programme.
FMDQ Exchange said its Board Listings and Markets Committee approved the listing, which was sponsored by CardinalStone Partners Limited.
NBET Finance Company, established by Nigerian Bulk Electricity Trading PLC (NBET), serves as a special purpose vehicle for raising capital through the financial markets to support Nigeria’s power sector.
NBET plays a central role in the electricity market as the primary off-taker, purchasing electricity from generation companies and selling it to distribution companies. Its transactions support commercial arrangements across the electricity value chain.
According to NBET Managing Director, Akinola Odeyemi, the bond proceeds will help settle outstanding legacy debts owed to GenCos, improve liquidity across the electricity value chain and support better operational efficiency and electricity supply.
Odeyemi described the listing as a continuation of the Federal Government’s efforts to address outstanding obligations in the power sector, following the successful listing of the programme’s Series 1 bonds.
THE ISSUES
The bond issuance addresses a major financial challenge in Nigeria’s electricity market: outstanding payments owed to power generation companies.
GenCos depend on payments for electricity supplied to sustain their operations and meet financial obligations. Delays in payments can therefore affect their ability to maintain facilities, purchase fuel and invest in additional generation capacity.
By raising long-term financing to settle legacy debts, the bond programme is intended to improve liquidity and strengthen the financial position of participants across the electricity value chain.
However, settling outstanding debts does not, by itself, resolve the wider financial challenges facing the power sector. The extent to which the funding improves electricity supply will also depend on whether the market can sustain timely payments and improve the financial relationships between generation, transmission and distribution operators.
The ₦728.98 billion issuance also demonstrates the capacity of Nigeria’s debt capital market to mobilise substantial long-term funding for infrastructure-related financing.
WHAT’S BEING SAID
“We are pleased to mark the listing of the ₦728.97 billion Series 2 Power Sector Bond on FMDQ Exchange, representing another significant milestone in the ongoing efforts to restore liquidity and strengthen the financial sustainability of Nigeria’s power sector.” – Akinola Odeyemi, Managing Director, NBET.
“The proceeds will help settle outstanding legacy debts owed to GenCos, improve liquidity across the electricity value chain, and support enhanced operational efficiency and a more reliable electricity supply nationwide.” – Akinola Odeyemi, Managing Director, NBET.
“Beyond the listing, it underscores the transformative role of capital markets in mobilising long-term financing to address critical infrastructure needs and support sustainable economic development.” – Michael Nzewi, Group Managing Director, CardinalStone Partners Limited.
WHAT’S NEXT
NBET said it intends to sustain the momentum through subsequent phases of its issuance programme. The company has not provided details of the timing or size of those phases in the announcement.
The key measure of the bond’s impact will be how effectively the proceeds are deployed to settle outstanding obligations and improve liquidity across the electricity market.
BOTTOM LINE
The ₦728.98 billion bond listing gives NBET access to long-term capital to address legacy debts owed to GenCos. Its success will ultimately depend on whether the funding helps improve payment flows and strengthens the financial sustainability of Nigeria’s electricity market.
