By Adedayo Akinwale
The United States Agency for International Development (USAID) Thursday signed N13 billion bond guarantee with InfraCredit, a Nigeria-based private infrastructure guarantee company, to boost the Nigerian power sector.
The USAID Mission Director, Mr. Stephen Haykin, while speaking at the signing of the Memorandum of Understanding (MoU) in Abuja, said more consumers in Port Harcourt would have access to a reliable power supply.
A statement Thursday from the US embassy said that InfraCredit would also partner with GEL Utility Limited, which develops, operates and provides grid-connected and off-grid electric power.
Haykin said that the declaration of partnership would provide increased access to electricity to consumers in Port Harcourt, adding that investments to the bond would be overseen by Stanbic IBTC Trustees.
He stated: “Today’s partnership marks the first-ever risk sharing arrangement between USAID and InfraCredit and emphasizes both institutions’ dedication to supporting the development of Nigeria’s power sector.
“The N13 billion ($36.1 million) co-guarantee for a 15-year bond will allow GEL Utility Limited, a member of the Genesis Energy Group that develops, operates and provides both on-and off-grid power solutions, access to long-term local currency financing at a reasonable interest rate and tenor. The financing terms, consistent with a favourable investment environment, will permit GEL to expand its generation and distribution capacity in areas with low energy access.”
Also, the Chief Executive Officer of InfraCredit, Chinua Azubike, said his company is committed to facilitating investments in the power sector by providing guarantees in collaboration with its strategic partners such as Power Africa.
According to him, “When we are able to draw on Power Africa’s capacity, networks, competence and credit quality. We can achieve our mutual objective of bridging the power infrastructure gap.”
Azubuike noted that the transaction with GEL – the first beneficiary of the co-guarantee arrangement between InfraCredit and USAID – demonstrates how private sector-led institutions can efficiently access the Nigerian debt capital market to fund the expansion of their power generating and distributing capacity.
He explained that GEL currently delivers electricity to the Port Harcourt Refining Company through an 84-megawatt power plant.
Azubuike stressed that through this new partnership, GEL would make 14 megawatts of excess generated electricity from their power plant available to customers within the Port Harcourt area either through Port Harcourt Electricity Distribution Company or directly to eligible customers.