Nigeria Raises N729bn Bond to Cut Power Sector Debt

The Nigerian government has raised approximately N728.9 billion through a Series 2 bond issuance under its N4 trillion Power Sector Multi-Instrument Issuance Programme, bringing total proceeds raised under the programme to more than N1.1 trillion.

Government officials disclosed the figures at a signing ceremony at Transcorp in Abuja on Monday. The Series 2 transaction comprises N402 billion in cash bonds raised from the capital market and N326.979 billion in non-cash bonds allotted directly to participating electricity generation companies (GenCos).

Akin Odeyemi, managing director and chief executive officer of the Nigerian Bulk Electricity Trading (NBET), the entity that buys electricity from generation companies and sells it to distribution companies, said the transaction marks another milestone in the government's efforts to address the sector's financial challenges.

He said the Series 2 issuance, launched in August 2026, involved 11 generation companies, up from eight that participated in the programme's first series. "The Series 2 issue has an aggregate value of approximately N729 billion and will be implemented in two tranches, Tranche A and B," Odeyemi said, adding that the higher participation reflects growing confidence among stakeholders in the programme as a credible mechanism for resolving verified outstanding debts.

Programme aims to settle a decade of unpaid debts

The Federal Government established the N4 trillion Power Sector Debt Reduction Programme to settle verified legacy debts owed to generation companies and other stakeholders while restoring liquidity and investor confidence in the electricity market. Series 1 of the programme was completed in January 2026 with an issuance of N501 billion involving eight generation companies.

Olu Verheijen, special adviser to the president on energy, represented by the team lead of her office, said Series 1 demonstrated the programme's viability, while Series 2 was designed to scale it up. "Series 1 proved the model, and Series 2 is scaling it," she said, adding that the government has executed settlement agreements with 11 generation companies representing 21 power plants. She said the programme was designed to address a decade-long accumulation of unpaid and unverified obligations to generation companies and gas suppliers, and that the Federal Executive Council had approved issuing up to N4 trillion in government-backed bonds to settle verified debts. Verheijen described the intervention as the largest of its kind in the power sector in more than a decade.

Officials say bonds alone won't fix the sector

Minister of Finance and Coordinating Minister of the Economy Taiwo Oyedele said the bond programme is only one part of the broader reforms needed to restore financial sustainability to Nigeria's electricity market. He said accumulated legacy debts have weakened liquidity, constrained investment and undermined confidence across the electricity value chain. "The Federal Government's objective is to resolve legitimate legacy obligations in a structured and transparent manner, while implementing the reforms necessary to prevent their recurrence," Oyedele said, adding that the bond programme must be paired with stronger market discipline, improved revenue collection, reduced technical and commercial losses, and greater efficiency and accountability across the sector.

According to Oyedele, the programme's success will ultimately be measured not by how many bonds are issued, but by whether it helps build a financially sustainable electricity market capable of attracting investment, meeting its obligations and delivering more reliable power to households and businesses. He commended NBET, the participating generation companies, investors, advisers, regulators and other institutions involved in the transaction.

Representing the Minister of Power, Joseph Tegbe, Permanent Secretary Mahmuda Mamman said the bond issuance reflects the government's commitment to addressing the structural challenges facing the electricity industry and forms part of efforts to build a stable power supply and lay the groundwork for sustainable development.

Verheijen said the government's broader objective is to move the electricity sector "from debt and dysfunction to delivery and discipline," and that the intervention, alongside other power-sector reforms, is expected to generate fresh investment and ultimately improve electricity supply. "The last mile of what we are doing here belongs to millions of homes, offices and industries across Nigeria who will enjoy more reliable electricity because of this bond programme and other associated reforms," she said.

Odeyemi said NBET will continue working with government institutions, financial institutions, generation companies and other stakeholders to develop sustainable financial solutions for the sector, with the aim of restoring liquidity, financial sustainability and confidence across Nigeria's electricity market.