The Nigeria Sovereign Investment Authority (NSIA) has refunded $417.46 million to Nigeria Bulk Energy Trading Company Plc. (NBET) following the expiration of the four-year investment agreement terms. The refunded sum, confirmed yesterday by NSIA management, comprises the principal sum and accrued interest for four years the Authority staked the funds into investments. Giving insight into tranches of refunds, NSIA said the transfers of the funds were carried out in three tranches of $8 million (May 2016), $5.5 million (August 2016) and $403.96 million (July 2018).
“The returned funds consist of the principal of $350 million allocated to the NSIA from the proceeds of the $1 billion Eurobond issued by the Federal Government of Nigeria in July 2013 under a fund management agreement and the sum of $67.46 million (net of fees) as interest and earnings over the investment period,” it said in a statement issued by NSIA Communications Adviser, Titilope Olubiyi. Speaking on the development, the Managing Director and Chief Executive Officer, NSIA, Mr. Uche Orji, stated 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,” he said. Commenting on the transfer, Dr. Marilyn Amobi, Managing Director/ Chief Executive Officer of NBET, said the firm is pleased with the management of the funds over the last four years. NBET was incorporated on July 29, 2010, as a ‘Special Trader’ licensed by the Nigerian Electricity Regulatory Commission (NERC), pursuant to the provisions of the Electric Power Sector Reform Act (EPSRA) of 2005.
NBET buys electric energy and ancillary services from independent power producers including companies that were created out of the generation assets of the Power Holding Company of Nigeria; and resells to distribution network operators (DNOs) as well as large general service (LGS) customers, who take electric energy from locations across the integrated transportation network”. To enable NBET fulfil its mandate and drive investment into Nigeria’s power sector, NBET must have a robust capitalization that provides comfort to investors that NBET is able to bear sovereign risks as well as prompt payment for power supplied by the generating companies (GENCOs) and independent power producers to the national grid.