InfraCredit’s Guarantee supports GEL Utility funding SPV plc’s issuance of N13 billion 15 year senior guaranteed fixed rate series 1 infrastructure bonds due 2034
InfraCredit, a ‘AAA’ rated specialised infrastructure credit guarantee institution backed by the Nigeria Sovereign Investment Authority, GuarantCo (a Private Infrastructure Development Group company), KfW Development Bank and Africa Finance, is pleased to announce the co-guarantee with the United States government through its Agency for International Development (USAID), of GEL Utility Funding SPV Plc’s (“GEL-SPV”) NGN13.0 billion 15-Year Series 1 Senior Guaranteed Fixed Rate Infrastructure Bonds Due 2034 (the “GEL Bonds”) under a NGN50 billion Debt Issuance Programme.
GEL Utility Limited (‘’GEL’’) develops, and operates grid-connected or off-grid electric power in Nigeria, and is the operator of an 84MW power plant which provides captive off grid electric power to the Port Harcourt refinery under a 20-year power purchase agreement with the NNPC. GELUL through a sister company also operates the foremost residential mini-grid in Nigeria at Lagos State, as well as managing the industrial mini-grid at the Calabar Free Trade Zone-Cross Rivers State for 12years running.
The GEL Bonds will be the first corporate infrastructure bonds issued in the Nigerian debt capital markets guaranteed by InfraCredit and co-guaranteed by the U.S. Agency for International Development (“USAID”).
With the benefit of the co-guarantee, the Series 1 Bonds was accorded a ‘AAA’ credit rating by Agusto & Co. and Global Credit Ratings Co. The Series 1 Bonds was 123% subscribed with firm commitments from twelve (12) institutional investors including ten (10) domestic pension funds.
In a statement, the Chairman of GEL Utility Limited, Mr. Akinwole Omoboriowo noted that “GELUL intends to take maximum advantage of compelling opportunities created by the extant laws regulating the Nigeria Electricity Supply Industry (“NESI”) as enforced by NERC, and we shall continue to work very closely with InfraCredit and USAID in deploying multiple clean and renewable power projects to locations across Nigeria where electricity supply can be delivered sustainably, reliably and competitively”
According to the Chief Executive Officer of InfraCredit, Chinua Azubike, “The success of this collaboration demonstrates InfraCredit and USAID’s commitment to facilitating access to long term local currency finance to support Nigeria’s energy sector and enhance our journey to self-reliance; also importantly is the strategic significance of InfraCredit’s ability to crowd-in risk sharing capacity from highly rated development institutions like USAID. InfraCredit is committed to facilitating investments in the power sector by providing guarantees in collaboration with strategic partners like USAID and Power Africa. We believe this transaction marks a significant milestone and inflection point for our risk sharing strategy”.
“Today’s agreement highlights a ground-breaking collaboration to increase access to power for consumers in Port Harcourt,” said Stephen M. Haykin, Mission Director of USAID/Nigeria, the co-guarantor for the bond. “This first-ever risk sharing arrangement between USAID and InfraCredit emphasizes both institutions’ dedication to supporting the development of Nigeria’s power sector and will allow GEL Utility Limited to expand its generation and distribution capacity in areas with low energy access.”
United Capital Plc acted as Lead Issuing House/Bookrunner for the transaction.