Geregu Power Plc is raising about N40 billion from the capital market to support its ongoing expansion project. Geregu Power generates about 10 per cent of Nigeria’s power supply.
Geregu Power, a power generation company (Genco) owned by billionaire businessman, Mr. Femi Otedola, has launched its N40 billion Series I Fixed Rate Senior Unsecured Bond Issue. The issuance is the first tranche under the company’s N100 billion multi-instrument debt programme.
Geregu Power will use the net proceeds of the N40 billion bond to part-finance expansion of its current power generation capacity and also to acquire other strategic new power assets in Nigeria.
The Genco is offering naira-denominated seven-year bonds at the par value of N1000 with a pricing range of between 12.75 per cent and 13.25 per cent. The bond is due in 2029 but it has a 24-month moratorium on principal repayment. The fixed rate coupon will be paid semi-annually while the principal repayment will be by way of amortised-redemption, after the expiration of the principal moratorium period.
The bond is expected to be listed on the FMDQ Securities Exchange Limited and the Nigerian Exchange Limited, providing investors with opportunity to trade on their bondholdings.
Geregu Power is rated Bbb+ by Agusto & Co and A by Global Credit Rating, the same ratings awarded to the issue by the rating agencies.
A power generation company at Itobe, Ajaokuta, Kogi State, Geregu Power plant was constructed by the Federal Government and inaugurated on February 16, 2007 to generate electric power and supply to the national grid managed by the Transmission Company of Nigeria (TCN).
Geregu Power is effectively wholly-owned and operated by Amperion Power Distribution Company Limited (APDCL), after APDCL acquired remaining 20 per cent equity stake held by government.
The Federal Government had in 2013, through the Bureau of Public Enterprises (BPE) initially sold 80 per cent stake to APDCL while it retained 20 per cent equity stake hed by BPE and Ministry of Finance Incorporated.
Geregu Power’s main business is electric power generation and sale of electric power through the national grid of the TCN to the Nigerian Bulk Electricity Trading Plc (NBET). The national grid serves as a “power pool” to which all the power plants and load centres are connected.
The company’s power plant consists of three natural gas-fired SIEMENS V94.2 STG5-2000E gas turbine generator units with a 435MW installed capacity. The turbine units are GT11, GT12, and GT13 and each is designed to produce 145 MW at 15.75KV, stepped up to 330kV via a 173.6MVA power transformer and generates on average 10 per cent of Nigeria’s power.
As part of its operations, natural gas is transported by Nigerian Gas Company (NGC) from SEPLAT through a 135km, 24 inches underground pipeline in the Niger Delta at 35 bar pressure and reduced to 25 bar operating pressure. The plant supplies power directly to the national grid via the transmission switchyard.
