INFRACREDIT’S GUARANTEE SUPPORTS GREEN LIQUIFIED NATURAL GAS LIMITED’S ISSUANCE OF N5BILLION 10-YEAR SENIOR GUARANTEED FIXED-RATE SERIES I INFRASTRUCTURE BONDS DUE 2033
Lagos, 14 June 2023: InfraCredit, a ‘AAA’-rated specialised infrastructure credit guarantee institution, is pleased to announce its guarantee of GLNG Funding SPV PLC’s NGN5.0 billion 10-Year Series I Senior Guaranteed Fixed Rate Infrastructure Bonds Due 2033 (the “GLNG Series I Bonds” or “Bonds”) under the NGN50 billion Debt Issuance Programme. GLNG Funding SPV PLC is a special purpose funding vehicle established by the promoters of Green Liquified Natural Gas Limited (“GLNG”) and Green Fuels Limited (“GFL”) as part of GLNG Group’s capital-raising plan.
GLNG Group is a clean energy solutions provider, delivering natural gas and power-as-a-service to industrial and logistics customers which enable them reduce reliance on inefficient and environmentally damaging diesel, LPFO and petrol solutions. GFL has operated its compressed natural gas (“CNG”) distribution business since 2011 and GLNG begin its power-as-a-service activities in 2018. The Group’s two (2) gas compression and distribution facilities in Ogun State make it the largest in Nigeria with approximately 10.5mmscfd capacity, while its LNG business and solar power initiatives are currently in development stage with expected commissioning by 2024. The Group presently delivers an average of 4.2 million SCM of CNG per month to industrial and Autogas customers in Southwest Nigeria which lack access to piped gas infrastructure.
GLNG Group is a first-time issuer in the debt capital markets. With the support of InfraCredit’s guarantee, the GLNG Series I Bonds were accorded a ‘AAA’ long term credit rating by Agusto & Co. and Datapro, reflecting the high degree of creditworthiness and the robust quality of the Bonds. The Bond issue was oversubscribed by 108% by ten institutional investors, including pension fund administrators. The Bond proceeds will be used to finance the development of its Liquified Natural Gas plant and expand its CNG distribution and power-as-a-service capabilities. The Bonds were priced off the yield on the comparable FGN Sovereign Bonds, providing a unique opportunity for pension funds to diversify their portfolios with “AAA”-rated, risk-adjusted return yielding assets.
The United States Trade and Development Agency https://ustda.gov/ustda-supports-new-lng-infrastructure-in-nigeria/ provided a grant for the technical feasibility study of the Group’s LNG project in 2020, highlighting its technical and commercial viability along with the anticipated environmental and social impact of improving energy reliability while displacing emissions from dependence on liquid fuels.
In a statement, the Chairman of GLNG, Mr. Olajide Rosiji stated: “This maiden bond transaction is an important milestone for GLNG, as it provides the leverage to finance our ambitious plan to establish a state-of-the-art LNG plant in Nigeria. More importantly, the success of this transaction reinforces our steadfast commitment to contribute to Nigeria’s clean energy and transportation landscape and foster sustainable economic growth in the region. I am therefore profoundly grateful to the investors in our debut debt offering, especially the Nigerian pension funds, whose investment in our Bonds demonstrates the robust appetite of local institutional investors to finance private-sector-led infrastructure development. I also thank the entire InfraCredit team, the Guarantor of this Series 1 Bonds, whose backing provided crucial financial security that crowded investors into the Bonds and underscores the trust and credibility that our project holds. I am particularly grateful to the Lead Issuing House, Renaissance Securities and the other Issuing Houses for their role through the transaction cycle. We are confident that our gas distribution, power-as-a-service and solar deployments will not only contribute to Nigeria’s energy security but also create a positive socio-economic impact for the entire nation.”
According to the Chief Executive Officer of InfraCredit, Mr. Chinua Azubike, “It has been an exciting journey working with GLNG Group on this groundbreaking transaction, showcasing our commitment to inclusive access to local currency finance for infrastructure development. The project aligns with InfraCredit’s Clean Energy Transition Strategy and Nigeria’s Energy Transition Plan, supporting cleaner energy sources and reducing emissions. The growing domestic demand for reliable clean energy supply validates the business plan, aiming to create jobs, reduce GHG emissions, bolster local industries, and drive economic development. Autogas adoption, in response to fuel subsidy removal, offers an affordable, sustainable alternative, alleviating costs, reducing pollution, and promoting climate goals. The success of GLNG’s maiden bond issuance affirms pension funds’ commitment to finance sustainable infrastructure assets and the private sector’s potential for long-term local currency finance, including for first-time issuers. We also appreciate USTDA’s support with a project preparatory grant to enable deeper understanding of the expected socio-economic impact of GLNG Group’s infrastructure development plans. Going forward, InfraCredit remains committed to unlocking domestic capital for sustainable infrastructure development while meeting climate change goals and diversifying local investment portfolios, including expected future support for GLNG Group as it implements renewable energy solutions for its customers.”
Renaissance Securities (Nigeria) Limited acted as Lead Issuing House/Bookrunner and ARM Securities Limited and FCMB Capital Markets Limited acted as Joint Issuing Houses and Bookrunners for the transaction.
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Green Liquified Natural Gas Limited
Green Liquified Natural Gas Limited (GLNG) was incorporated in July 2018 to carry on the supply of LNG and provide captive power solutions to industrial customers. The Company’s LNG business is currently in the development stage while captive power operations commenced in October 2018. GLNG was established as part of Green Fuels Limited’s (GFL) strategy to expand its operations and market coverage (as a result of growing demand for natural gas by industrial users including some of its existing CNG customers) into liquefaction and forward integration into the provision of end-end captive power solutions to its customers in a bid to enhance the Company’s competitiveness and expand its radius of market coverage as LNG, compared to CNG, presents better storage requirement, cost efficiency, and volume portability.
