The Nigeria Sovereign Investment Authority (NSIA) announced on Thursday that it was able to grow the $350m Nigeria Bulk Energy Trading Company (NBET) funds under its management to $417.46 million and has transferred same to the bulk trader following the expiration of the 4 years investment term.
The NSIA said the funds were transferred to NBET in three tranches, including; US$8 million (May 2016), US$5.5 million (August 2016) and lastly US$403.96 million (July 2018).
“The returned fund consists of the principal sum of US$350 million allocated to the NSIA from the proceeds of the US$1 billion Eurobond issued by the Federal Government of Nigeria in July 2013 under a fund management agreement and the sum of US$67.46 million (net of fees) as interest and earnings over the investment period,” the NSIA said in a mailed statement.
Speaking on the development, the Managing Director and Chief Executive Officer, NSIA, Uche Orji said that the Authority had accomplished its goals of “enhancing NBET’s liquidity position whilst enabling the company to focus on its principal function of developing the electricity market. NSIA’s role as fund manager helped to safeguard NBET’s capital against market volatility and also conferred the agreed financial benefits on the company.”
Out of the proceeds of the successful $1 billion Eurobond issuance in 2013, the federal government under President Jonathan’s administration allocated an additional $550 million to the Nigeria’s Sovereign Wealth Fund (SWF) to improve power sector financing, bringing the total monies available to the NSIA then for management to $1.55 billion.
$350 million out of the money was allocated to the NBET as a liquidity facility but was transferred to the SWF to manage on behalf of the bulk trader.
Ngozi Okonjo-Iweala, the then finance minister and Coordinating minister for the economy had raised the confidence that the money would back up the bulk trader’s finances and give confidence to the international community that it had the needed resources to be an intermediary in the power sector.
Commenting on the transfer in the same statement from the NSIA on Thursday, Marilyn Amobi, Managing Director / Chief Executive Officer said NBET is pleased with the management of the fund over the last 4 years.
“NSIA as a competent fund manager preserved the capital; thus, helped to promote NBET’s credit worthiness as an off-taker for grid injected electric energy in the Nigerian Electricity Supply Industry (“NESI”),” Amobi stated.
Onyinye Nwachukwu, Abuja
