First SEC Approved 15-Year Corporate Green Infrastructure Bond in the Nigerian Debt Capital Markets
Lagos, Nigeria – February 28, 2019 – Following the receipt of Board’s approval on 26th September 2018 to raise additional capital and the receipt of clearance from the Securities and Exchange Commission, North South Power Company Limited (“NSP” or “the Company”) through NSP-SPV PowerCorp Plc, have issued its first N8.5 billion 15 year 15.60% Series 1 Guaranteed Fixed Rate Senior Green Infrastructure Bonds (“Series 1 Green Bonds”), due 2034 under a N50 billion Debt Issuance Programme. The Series 1 Green Bonds is the first certified green corporate bond and the longest tenured (15 year) corporate bond issued in the Nigeria debt capital markets.
The Series 1 Green Bonds was oversubscribed by 60% with firm commitments from twelve (12) institutional investors including nine (9) pension funds, and priced at 70 bps spread to the comparable 15-year sovereign benchmark bond (FGN 2034) using the closing yield on the reference date (04 February 2019) adopted for the book building.
The Series 1 Green Bonds was certified by TUV NORD CERT (www.tuv-nord.com), an approved verifier under the Climates Bonds Standard, in conformance with the International Capital Market Association’s (ICMA’s) Green Bond Principles, Nigerian Federal Ministry of Environment’s Nigerian Green Bond Guidelines, and the Green Bonds Issuance Rules of the Nigeria Securities & Exchange Commission. 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 (www.alcbfund.com), an initiative of KfW Development Bank
In a statement, the Executive Vice Chairman and CEO of North South Power Company Limited, Engr. (Dr) Olubunmi Peters noted that the success of the bond issuance is a significant milestone in the company’s long-term corporate strategy, demonstrating its market leadership, innovation and commitment to the highest standards of environmental, social and corporate governance. “With the completion of the Series 1 Guaranteed Green Infrastructure Bonds issuance, the Company 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.”
NSP currently generates, on the average, 8% of Nigeria’s power providing power to millions of Nigerians and aims to be the leading power company in Sub-Saharan Africa by safely providing affordable, reliable, and sustainable power to its customer base. The medium-term objective of the Company is to contribute more than 10% of Nigeria’s power generation output by 2020.
NSP’s vision is to be a leading sustainable power company that safely provides reliable and sustainable energy. The Company seeks to do this by leveraging technology, expertise and knowledge to provide energy and infrastructure solutions required by its customers. The Company shares a passion to help meet the continent’s current and increasing energy needs, hence, providing communities and countries the opportunity for economic growth due to the availability of reliable and sustainable electricity.
United Capital Plc acted as Lead Issuing House/Financial Adviser, while Stanbic IBTC Capital Limited, Vetiva Capital Management Limited and Zenith Capital Limited were Joint Issuing Houses to the Bond Issuance.
About the Issuer
NSP-SPV PowerCorp Plc has no subsidiaries or affiliates and has been established as a special purpose vehicle for the purpose of raising funds from the capital market to finance capital expenditure and optimize the capital structure of the Sponsor.
About the Sponsor
North South Power Company Limited is an Africa focused electricity generation company with a diverse and emerging portfolio focused on the electricity value chain. Its business model is designed to encompass a broad range of technologies and power types including hydropower, wind, biomass and solar with a focus on Sub-Saharan Africa.
The Federal Government of Nigeria, as represented by the Ministry of Finance Incorporated (“MoFI”) through the BPE, transferred it rights to the operations, restoration, and maintenance of the hydroelectric power production facilities located on the Shiroro Reservoir and the related hydro property of the Shiroro Hydro Electric Power Plant to NSP through a 30 year Concession Agreement.
Shiroro Hydro Electricity Plc (“Shiroro”) is a hydroelectric power company located in Niger State of Nigeria. The Company was created as part of the successor companies involved in the privatisation programme of the Federal Government of Nigeria.
North South Power Company Limited has been assigned a A- long term national scale rating by Agusto & Co. and GCR.
About the Guarantor
InfraCredit is a specialized credit enhancement facility established to support long term local currency infrastructure financing by providing guarantees to enhance the credit quality of local currency debt instruments issued to finance eligible infrastructure related assets in Nigeria. Its guarantees would act as a catalyst to attract the investment interest from pension funds, insurance firms and other long-term investors, thereby deepening the Nigerian debt capital markets. InfraCredit has been assigned a AAA long-term Naira currency national scale rating by Agusto & Co. and GCR.