GCR Assigns Final Rating to Elektron Finance SPV N4.64bn Infrastructure Bonds
GCR Ratings has assigned a final national scale long-term issue rating of AAA (NG) to Elektron Finance SPV Plc’s N4.64 billion Series 1 Senior Guaranteed Fixed Rate Infrastructure Bonds, with the outlook accorded as stable.
Recall that Elektron Energy successfully closed its debut capital markets transaction – a 15-year,InfraCredit-guaranteed infrastructure bond issued via Elektron Finance SPV Plc.
The bond, which has been approved by the Securities and Exchange Commission, is designed to fund the flagship Victoria Island Power Project (VIPP) and presents a significant step towards Elektron’s broader N200 billion bond program.
Once completed, the 30MW embedded gas project will supply reliable power to Lagos’ commercial hub through a dedicated 12.6km distribution network.
In its rating note, GCR said Elektron Finance SPV Plc, a special purpose vehicle was incorporated in July 2023 to raise capital through the issuance of securities, primarily targeting Qualified Institutional Investors and High Net worth Individuals.
Ratings analysts at GCR said in the note that the debt capital raised will be directed toward financing eligible long-term infrastructure projects for related companies, such as Victoria Island Power Limited (VI Power, Co-obligor.
The rating note revealed that the N4.64 billion Series 1 Senior Guaranteed Fixed Rate Infrastructure Bonds was issued under Elektron Finance’s N200 billion Bond Issuance Programme which was registered with the Securities and Exchange Commission in July 2025.
The Series 1 Bonds will constitute direct, unconditional, unsubordinated, and irrevocable obligations of the Issuer, the Co-obligor, and Infrastructure Credit Guarantee Company Plc, under the Deed of Guarantee, GCR said.
Ratings analysts added that the Series 1 Bonds was issued in July 2025 at a coupon rate of 22%, with a fifteen-year tenor (maturing in 2040) and a three-year moratorium on the principal, after which principal repayments will commence semi-annually.
However, they noted that coupon payment will accrue from the issue date and will be paid semi-annually in arrears. The net proceeds of the Issue will be utilised to refinance bridge facilities for VI Power.
The rating agency detailed that VI Power, a special purpose vehicle incorporated by Elektron Power Infracom to develop and own a 30MW independent gas-fired embedded power generation plant in Victoria Island, Lagos, in collaboration with Eko Electricity Distribution Company.
Rating analysts at GCR said VI Power will be responsible for managing the distribution infrastructure, billing and collections from customers (primarily corporate and commercial) within the Victoria Island axis, in line with the guidelines for distribution franchising as provided by the Nigerian Electricity Regulatory Commission.
Although the 30MW power project is in its advanced stages, it is expected to be completed before the end of Q3 2026, barring any delays, the rating note explained.
GCR said during the project construction phase, VI Power will service maturing obligations under the Series 1 Bonds through a dedicated reserve account, which the Company will periodically fund.
Post-construction, the Company will service debts from cash flow from operations, it added, saying the Series 1 Bonds is fully guaranteed by InfraCredit.
The guarantor will provide an irrevocable and unconditional guarantee in favour of the Bond Trustee for and on behalf of the Series 1 Bondholders to ensure the timely performance of the obligations of the Issuer under the Series 1 Bonds Issuance.
According to the rating note, the payment obligations of the Issuer, Co-Obligor and Guarantor in respect of the Series 1 Bonds, will rank at least pari passu with all other unsecured unsubordinated indebtedness and monetary obligations of the Issuer, the Co-obligors, and the Guarantor respectively, both present and future.
InfraCredit in its capacity as Guarantor, will guarantee the timely payment of both the interest and principal obligations of the Series 1 Bonds.
“Under the Guarantee, if by five business days prior to a payment date, the payment account has not been funded by the Issuer and the Co-obligor, the Bond Trustees will issue a Demand Notice to the Guarantor, and InfraCredit is obliged to fund the payment account with the due amount by the payment date to ensure bondholders are paid. The Guarantee will be in force until all payment obligations under the Series 1 Bonds have been fully discharged”.
Given that InfraCredit offers timely and full coverage of all payments due under the Series 1 Bonds through the Deed of Guarantee, the Bonds bear the same credit risk as InfraCredit, GCR said. As such, the final national-scale long-term issuer rating of the Series 1 Bonds is equalised with the Guarantor’s national scale long-term Issuer rating.
The legal opinion from the solicitor to the Issue, Details Commercial Solicitors, indicates that all transaction documents to which each of the Issuer, the Co-obligors, and the Guarantor, is a party will constitute legal, valid, binding and enforceable obligations against each of them under the Nigerian law.
The stable outlook reflects that of the Guarantor’s national scale long-term Issuer rating, GCR said Nigeria’s Borrowing Cost Eased as African Eurobonds Rally
