Tunde Bakare
The Federal Government has issued a ₦501 billion inaugural power sector bond.
The bond was issued under the Presidential Power Sector Debt Reduction Program. Notably, the offer achieved one hundred per cent subscription.
Pension funds, banks, asset managers, and other institutional investors participated actively.
The program, championed by President Bola Ahmed Tinubu, targets long-standing payment arrears owed to power generation companies. For more than a decade, these debts constrained liquidity across the electricity value chain. As a result, balance sheets weakened and investment appetite declined. Therefore, the new bond represents a decisive intervention.
The issuance followed the successful completion of Series One by NBET Finance Company Plc. The Series One bond closed at ₦501 billion. Of this amount, ₦300 billion came from capital market investors. Meanwhile, ₦201 billion was allotted directly to participating generation companies. This structure reflects strong confidence in the reform agenda.
Under the program, authorities are settling verified receivables for electricity supplied between February 2015 and March 2025. These settlements follow negotiated agreements with generation companies. So far, five companies have executed agreements with the Nigerian Bulk Electricity Trading Plc.
They include First Independent Power Limited and Geregu Power Plc. Others are Ibom Power Company Limited, Mabon Limited, and Niger Delta Power Holding Company Limited. Collectively, they operate fourteen power plants nationwide.
The total negotiated settlement for these companies stands at ₦827.16 billion. Payments will occur in four phased instalments. Proceeds from the Series One issuance will fund the first two instalments. These payments amount to ₦421.42 billion. This represents about half of the total settlement value. Payments will combine cash and bond notes.
Speaking at the signing ceremony in Lagos, the President’s Special Adviser on Energy, Olu Arowolo Verheijen, described the program as a market reset. She explained that it combines debt resolution with structural reforms. She also commended President Tinubu’s leadership. In addition, she acknowledged the support of the Ministers of Finance and Power.
Industry stakeholders welcomed the development. Sahara Power Group Managing Director, Kola Adesina, said the initiative restores confidence. He noted that debt recovery enables fresh capital investment. Consequently, Sahara plans to commence expansion works at the Egbin Power Plant.
By clearing historic arrears, the program will improve liquidity for generation companies.
It will also strengthen operational capacity and unlock new investment. Ultimately, the initiative supports more reliable electricity supply nationwide.