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The CardinalStone power sector bond issuance has marked a significant development in Nigeria’s electricity financing landscape following the successful completion of a N501.021 billion bond offering. The transaction forms part of a broader initiative designed to address long standing financial challenges in the country’s power sector and restore investor confidence.
CardinalStone Partners Limited served as the lead financial adviser and Lead Issuing House for the transaction, which was executed under the N4 trillion Power Sector Multi Instrument Issuance Programme. The initiative operates within the framework of the Presidential Power Sector Debt Reduction Programme.
The bond represents the first tranche of the larger programme and carries a seven year tenor. Market observers describe the issuance as a major step toward improving liquidity and strengthening Nigeria’s domestic debt capital market.
Structure of the CardinalStone power sector bond issuance
The N501.021 billion bond issuance consisted of two major components. A N300 billion offering was placed with institutional and individual investors, demonstrating strong participation across the investment community.
An additional N201 billion allocation was provided to eligible Power Generation Companies that had executed settlement agreements under the programme. The full subscription of the bond indicates sustained investor interest in government backed financial instruments.
The programme is supported by Bola Ahmed Tinubu and aims to resolve payment arrears owed to electricity generation companies. For more than a decade, these unpaid obligations have contributed to liquidity shortages, weakened financial positions, and limited investment across the electricity value chain.
Government authorities state that clearing these arrears is expected to improve operational efficiency and support long term sustainability in the sector.
Government support and institutional backing
The bond issuance received the guarantee of the Federal Government of Nigeria, reinforcing its credit profile and investor appeal. The transaction was sponsored by Nigerian Bulk Electricity Trading Plc, the agency responsible for managing electricity purchase agreements within Nigeria’s power market.
The execution of the programme was carried out under the leadership of Wale Edun, Minister of Finance and Coordinating Minister of the Economy. Officials describe the initiative as part of broader reforms intended to restore financial discipline and improve confidence in the electricity sector.
Industry analysts note that government guarantees and policy backing played a crucial role in attracting investor participation and ensuring the successful completion of the transaction.
Impact on Nigeria capital market and power sector
The CardinalStone power sector bond issuance is regarded as an important milestone in Nigeria’s domestic debt capital market. It reflects continued demand for credit enhanced public sector instruments and highlights the growing role of capital markets in funding infrastructure related reforms.
The programme seeks to eliminate liquidity constraints that have historically affected power generation companies. By addressing payment backlogs, policymakers expect improved cash flow across the electricity value chain, increased private sector participation, and stronger operational performance.
Financial experts suggest that sustained reforms and reliable funding mechanisms could help improve electricity supply and support economic growth by enabling better energy infrastructure.
Role of key stakeholders in the transaction
CardinalStone provided advisory services covering transaction structuring, regulatory coordination, stakeholder engagement, and overall execution leadership. The firm acknowledged the contributions of several public sector stakeholders involved in the process.
The company expressed appreciation to Olu Verheijen, Special Adviser to the President on Energy, for her role in advancing the programme. It also recognised the management of Nigerian Bulk Electricity Trading Plc led by Johnson Akinnawo, as well as the Debt Management Office headed by Patience Oniha.
The firm further acknowledged other government institutions, professional advisers, and members of the investing public for their participation and confidence in the issuance.
Investor confidence and economic reform outlook
According to Michael Nzewi, Group Managing Director of CardinalStone, the successful issuance demonstrates continued investor confidence in Nigeria’s capital markets. He stated that the transaction supports government efforts to strengthen the financial structure of the power sector.
He noted that the initiative aligns with broader economic reform objectives and is expected to help unlock investment opportunities while improving long term sector viability. Analysts believe that stable financing frameworks and improved financial discipline could encourage further infrastructure development in the electricity industry.
CardinalStone position in Nigeria financial services sector
CardinalStone operates as an independent multi asset investment banking group in Nigeria. The firm provides services across advisory, capital markets, asset management, securities trading, financing, trust, registrar, and pension operations.
The company reports that it has advised on more than N5 trillion in capital markets and mergers and acquisitions transactions. It also became the first brokerage to surpass N2 trillion in transaction value on the Nigerian Exchange.
The firm states that it remains committed to supporting sustainable economic growth and expanding Nigeria’s capital market through strategic financial advisory services.
Outlook for Nigeria power sector reform
The CardinalStone power sector bond issuance represents a key development in ongoing efforts to address structural challenges in Nigeria’s electricity industry. By resolving legacy debts and strengthening financial stability, policymakers aim to improve sector performance and attract new investment.
Experts indicate that sustained policy implementation and continued market participation will determine the long term success of the programme. However, the successful completion of the inaugural bond tranche signals progress toward achieving financial sustainability and strengthening Nigeria’s power sector.
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