The United States government through its Agency for International Development (USAID) and the Infrastructure Credit Guarantee Company Limited ( InfraCredit) on Thursday signed a Declaration of Partnership for the first-ever bond guarantee to provide increased access to electricity to consumers in Port Harcourt, Rivers State.
The N13 billion ($36.1 million) co-guarantee for a 15-year bond represents a partnership with InfraCredit, a Nigeria-based private infrastructure guarantee company and a Power Africa partner that seeks to facilitate private investment in infrastructure to support sustained economic growth in Nigeria.
Speaking during the signing ceremony, USAID Mission Director to Nigeria, Stephen Haykin, said Nigeria is important to the US government’s global development strategy and boosting Nigeria’s economic growth can only be fully realized through a healthy power sector.
He however, noted that despite having the largest population and largest economy in Africa, Nigeria suffers poor electricity supply. “The lack of a reliable and affordable electric supply in Nigeria impedes every facet of life – from local markets to large industries and schools, hospitals, and impacts the everyday lives of the people.
READ ALSO: Nigerians react to new Police tactical team, SWAT
“Today’s event highlights a ground-breaking collaboration between USAID, InfraCredit and GEL Utility Limited to increase access to power consumers in Port Harcourt. This co-guarantee marks the first-ever risk-sharing arrangement between USAID and InfraCredit, and emphasizes both institutions’ dedication to supporting the development of Nigeria’s power sectors,” Haykin said.
Also speaking during the event, the Chief Executive Officer of InfraCredit, Chinua Azubike, said the company was committed to facilitating investments in the power sector by providing guarantees in collaboration with strategic partners such as Power Africa.
“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,” said.
Also at the signing ceremony were the Chief Executive of Stanbic IBTC, Charles Omoera and Felix Achibri of GEL Utility Limited, who expressed optimism about the success of the partnership.
InfraCredit will partner with GEL Utility Limited, which develops, operates, and provides grid-connected and off-grid electric power. GEL delivers electricity to the Port Harcourt Refining Company through an 84-megawatt (MW) power plant.
Through the bond agreement, GEL will provide 14 megawatts of excess generated electricity from the power plant to customers within the Port Harcourt area, either through Port Harcourt Electricity Distribution Company or directly to eligible customers.
The proceeds of the bond stemming from this co-guarantee agreement will fund the implementation of the Excess Power Program in collaboration with the Nigerian National Petroleum Corporation and fund replacement of the GEL Utility Limited’s current short-term financing with long-term local currency debt.
Power Africa is a US government-led partnership coordinated by the USAID, which is working to increase electricity access in Nigeria as well as the African continent.
Since 2013, Power Africa has worked to add more than 30,000 megawatts of electricity generation capacity and 60 new homes and business connections across sub-Saharan Africa.
So far this initiative has leveraged over $50b in investment from public and private sectors and the partnership with InfraCredit is expected to bolster the figure.
