The Federal Government has raised N728.979bn through a fresh bond issuance to settle verified outstanding debts owed to electricity generation companies and improve liquidity in Nigeria’s power sector.
The Series 2 bond, issued under the N4tn Power Sector Multi-Instrument Issuance Programme, brings the total value of bonds issued under the first phase of the initiative to about N1.23tn.
Speaking at the signing ceremony in Abuja on Monday, the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, said the initiative was aimed at addressing accumulated obligations that had weakened liquidity, constrained investment and affected confidence across the electricity value chain.
According to him, settling the outstanding debts must be accompanied by reforms to prevent the accumulation of fresh liabilities in the sector.
Oyedele said the government would focus on strengthening market discipline, improving revenue assurance, reducing technical and commercial losses, and promoting greater efficiency and accountability across the electricity industry.
He noted that the success of the programme would ultimately be determined not by the size of the bonds issued but by improvements in the financial sustainability of the electricity market and the reliability of power supply to households and businesses.
The latest N728.979bn transaction comprises N402bn in cash bonds raised from the domestic capital market and N326.979bn in non-cash bonds allotted to participating generation companies under the Presidential Power Sector Debt Reduction Programme.
It follows the N501.021bn Series 1 bond issued in January 2026, which recorded full subscription. Of the amount raised under the first issuance, N300bn came from the capital market, while N201.021bn was issued as non-cash bonds to participating generation companies.
The Chief Executive Officer of the Nigerian Bulk Electricity Trading Plc, Akinola Odeyemi, said 11 generation companies were participating in the second phase, compared with eight GenCos under Series 1.
Odeyemi said the increased participation demonstrated growing stakeholder confidence in the programme as a framework for resolving outstanding obligations in the electricity sector.
He explained that years of unpaid obligations had weakened the ability of market participants to meet their commitments and limited the capacity of generation companies to invest in expanding electricity generation.
Also speaking, the Special Adviser to the President on Energy, Olu Verheijen, said the first issuance demonstrated the viability of the debt reduction model, while the second issuance was designed to expand its impact.
She said settlement agreements under the first series involved 11 generation companies representing 21 power plants.
The Federal Executive Council approved the N4tn Power Sector Multi-Instrument Issuance Programme in August 2025 to address verified legacy debts owed to electricity generation companies and gas suppliers.
The programme is expected to improve liquidity, restore investor confidence and support sustainable electricity generation while broader reforms are implemented to prevent the accumulation of new debts in the sector.
