Infracredit supports North South Power’s maiden Corporate Infrastructure Bond

Naira notes used to illustrate market trading
Naira notes used to illustrate the story.

InfraCredit, on Friday, presented its guarantee of the North-South Power (NSP) Company Limited’s N8.5 billion maiden infrastructure bonds.

InfraCredit is a Nigeria Sovereign Investment Authority (NSIA) affiliate.

The 15-year 15.60 per cent Series 1 Guaranteed Fixed Rate Senior Green bond was issued on Wednesday as the first certified corporate green bond under a N50 billion Nigerian Debt Issuance Programme.

The facility approved by the Securities and Exchange Commission (SEC) and the Debt Management Office (DMO) will be due for maturity in 2034.

A statement by InfraCredit sent to PREMIUM TIMES said the triple ‘A’ rated infrastructure credit enhancement facility is also backed by the GuarantCo, a private infrastructure development group, KfW Development Bank and Africa Finance Corporation (AFC).

NSP is the operator of a 30-year concession on the 600 megawatts (MW) Shiroro hydroelectric power plant.

The Series 1 Green Bonds were over-subscribed by over 60 per cent, with firm commitments from 15 institutional investors, made up of 11 pension funds priced at 70 basis points.

InfraCredit said the bond price was spread to the comparable 15-year sovereign benchmark bond (FGN 2034) using the closing yield on the reference date adopted for the book building.

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The development of the “Green Bond Framework” and the pre-issuance verifications was obtained through technical assistance support from the African Local Currency Bond Fund, an initiative of KfW Development Bank.

The Executive Vice Chairman and CEO of North-South Power Company Limited, Olubunmi Peters, said the success of the bond issuance was “a significant milestone in the company’s long-term corporate strategy.”

He said it was also a demonstration of its market leadership, innovation and commitment to the highest standards of environmental, social and corporate governance.

According to Mr Peters, with the completion of the Series 1 Guaranteed Green Infrastructure Bonds issuance, the NSP “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.”

The Chief Executive Officer of InfraCredit, Chinua Azubike, said infrastructure assets like Shiroro Hydroelectric Power Plant generate social, environmental and economic impact to the environment.

Such facilities, he said, contribute greenhouse gas emissions reduction, revitalizing disenfranchised areas, improving access to services and creating employment.

“Shiroro Hydro is an extremely essential and resilient asset with a 30-year consistent production history.

“North-South Power, with the acquisition of a 30-year concession in 2013, has demonstrated the competence and ability to deliver on its business targets from restoring capacity target to 600MW and a 45 per cent increase in power generation,” he said.

Mr Azubike said the company believes a sustainable and inclusive implementation of the eligible customer framework in a manner that generates economic benefits for all stakeholders will accelerate the industry’s strategic growth.

He said with the success of the maiden first-in-kind transaction, InfraCredit has further demonstrated its pioneering commitment to promoting financial inclusion, by bringing North-South Power, a first-time issuer to the domestic bond market.

The Fund Manager, African Local Currency Bond Fund, James Doree, said the maiden corporate green bond in Nigeria sets the benchmark for the domestic and regional capital market.

Proceeds from the Series 1 Green Bonds is expected to fund the overhaul of a 150MW hydropower turbine as well as finance the replacement of the NSP’s current short term foreign and local bank facilities with long-term local currency debt.

United Capital is the lead issuer to the bond, with Stanbic IBTC Capital, Vetiva and Zenith Capital (Nigeria) as Co-Issuing Houses and book-runners for the transaction.

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