GEL Utility Limited
GELUL’s business model is hinged on building modular, industrial-style power plants while offering fuel efficient solutions across the generation and distribution value chain. The company currently owns, operates and maintains an 84MW power plant that provides uninterrupted power supply to the Port Harcourt Refining Company (“PHRC”) in Port Harcourt.
Project Highlight
GEL Utility Limited (GEL U) is a Special Joint Venture Project Company between Genesis Energy Group (55%) and Engro of Pakistan (45%) incorporated in September 2012 for the purpose of executing a 20-year Power Purchase Agreement (PPA) signed with the Nigerian National Petroleum Corporation (NNPC). The said PPA was executed on the 6th of Aug 2012 to provide uninterrupted power supply to the Port Harcourt Refining Company (PHRC), a wholly owned subsidiary of the Nigerian National Petroleum Corporation (NNPC) based in Onne, Rivers State. The PPA became effective on 6 November 2014 having met all the conditions precedent one of which was that GEL Utility procured three (3) trailer mounted General Electric (GE) Dual Fired Gas Turbines with an installed capacity of 84MW for performance under the agreement. The mandate of the JV was to develop, operate and provide either grid-connected or off-grid electric power. Under the PPA, NNPC contracted GELUL for 24MW that must be generated and/or made available (every hour) to Port Harcourt Refinery by GEL Utility from the date on which the three (3) gas turbines are fully installed, tested, and commissioned (6 November 2014).
NNPC is required, under the PPA, to pay power tariff on capacity and energy generated from the plant on an exclusive basis i.e. GEL Utility is the sole and exclusive power supplier to the Port Harcourt Refinery Complex throughout the term of PPA. The term of the PPA may be extended prior to expiration on such terms as may be agreed by both parties. However, NNPC possesses an option to buy out or purchase the plant from Year 10 post commissioning (2024) at fair value, subject to the receipt of an independent valuation report.
13
Billion Naira
Reduction in carbon emission and other form of pollutions Access to reliable power will greatly boost disposable income by enhancing the ability of businesses and households.
Transaction Details
With InfraCredit’s guarantee, GEL was able to access the domestic debt capital markets for the first time and raise 15 year financing in local currency using a corporate bond by issuing a NGN13 billion 15-Year 15.15% Series 1 Senior Guaranteed Fixed Rate Infrastructure Bonds Due 2034 (‘the “GEL Bonds”) under a NGN50 billion Debt Issuance Programme.
The N13.0 Billion Series 1 Guaranteed Bonds was accorded a ‘AAA’ credit rating by Agusto & Co. and Global Credit Ratings Co. and issued as the first certified corporate green bond and the longest tenored (15-year) corporate bond issued in the Nigerian debt capital markets.
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.
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