Power Sector Risks Bankruptcy As Financial Crisis Hits N4 Trillion – Guardian

Barring swift intervention from government, the country’s power sector, which was privatized five years ago may soon collapse. No thanks to the N4t financial crisis that has pushed it to the brink of bankruptcy. Details obtained from different players in the sector, including invoices published by the Nigeria Bulk Electricity Plc., (NBET), documents made available by power generation companies (GenCos), as well as distribution companies (DisCos) all mirror worsening financial state of the sector.

The current shortfall include, power generation companies’ outstanding for power supply of N1.2t (between 2015 to October 2018); shortfall of 20 per cent on gas guarantee payment of N701.9b for 24 months; unpaid available capacities of GenCos from February 2015 till date, deemed capacity payments accruing from the ramp up and down instructions from the systems operations after nominated capacity; interests payment on all outstanding, and payments on impacts of free governor mode operations due to operation outside grid specifications and grid collapses.

Others include, associated cost due to NBET’s efficiency model implemented on GenCos on a volatile grid of about $4.262b (about N1.549t), funding for new transformers, and injection substations. While government is still in charge of transmission, the Electric Power Sector Reform Act of 2005, unbundled the national power company into a series of 18 successor companies; six generation companies and 12 distribution companies covering all 36 states. But the objectives of the reform have since remained elusive five years on.

 

 

United Capital Appointed Issuing House for N8.5bn NSP Green Bond – This Day

The United Capital Plc has been appointed lead issuing house and financial adviser of the first N8.5 billion Corporate Green Infrastructure Bond offer by the North South Power Company (NSP). The Securities and Exchange Commission (SEC) has approved the 15-year tenor bond, which represented the longest tenured bond issued by a corporate in the country.

The series 1 green bonds was assigned AAA national scale rating by Agusto & Co. and GCR  having being guaranteed by Infrastructure Credit Guarantee Company Limited and certified by TUV NORD CERT, an approved verifier under the Climates Bonds Standard, in conformance with the International Capital Market Association’s Green Bond Principles, Nigerian Federal Ministry of Environment’s Nigerian Green Bond Guideline and the Green Bonds Issuance Rules of the Nigeria Securities & Exchange Commission.

Speaking at the signing ceremony over the weekend in Abuja, Executive Vice Chairman/Chief Executive, NSP, Mr.  Olubunmi Peters said “with the completion of the Series 1 Guaranteed Green Infrastructure Bonds issuance, North South has established a long-envisioned link with a more sustainable long-term, local currency financing required to implement its ambitious strategic power generation expansion plan through the capital markets.” Chairman, NSP, Mallam Ibrahim Aliyu, said the offer represented a “first testing of the waters” by the company as it would be the first time it would raise funds from the formal capital market, though it had raised money from commercial banks.

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