The Federal Government has signed a ₦728.979 billion Series 2 bond as part of efforts to settle verified legacy debts owed to electricity generation companies and restore financial stability to Nigeria’s power sector.
The transaction is being executed under the government’s ₦4 trillion Power Sector Debt Reduction Programme and comprises ₦402 billion in cash bonds raised from the domestic capital market and ₦326.979 billion in non-cash bonds allocated to participating generation companies.
Speaking at the signing ceremony in Abuja, the Managing Director and Chief Executive Officer of Nigerian Bulk Electricity Trading Plc (NBET), Akinola Odeyemi, said the transaction marked another major step towards addressing the longstanding financial challenges in the Nigerian Electricity Supply Industry.
Odeyemi said the programme was designed to clear historical obligations, restore liquidity and rebuild confidence in the electricity market, thereby creating room for increased investment in power generation.
He disclosed that the Series 2 issuance, launched in August 2026, attracted 11 generation companies, compared with eight that participated in Series 1.
According to him, the increased participation reflects growing confidence in the Federal Government’s mechanism for resolving verified debts owed to power generators.
“Today’s event represents another important milestone in the Federal Government’s efforts to address the longstanding financial challenges confronting the Nigerian electricity supply industry and to strengthen the foundation for a more sustainable and reliable power sector,” he said.
Odeyemi said Series 2 followed the successful completion of Series 1 in January 2026, when about ₦501 billion was issued to eight participating generation companies.
He explained that the financial difficulties in the sector had affected the entire electricity value chain, limiting liquidity and reducing the ability of generation companies to invest in additional generating capacity.
The NBET boss said the debt programme should therefore be regarded as more than a mechanism for settling debts, describing it as part of broader measures to establish a financially sustainable electricity market.
He assured stakeholders that NBET would continue collaborating with government institutions, financial organisations, generation companies and other stakeholders to develop sustainable financing solutions for the sector.
Also speaking, the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, said the Series 2 bond was an important intervention to address accumulated obligations that had weakened liquidity and discouraged investment in the power sector.
Oyedele said the transaction consisted of ₦402 billion in cash bonds and ₦326.9 billion in non-cash bonds.
He stressed that while the Federal Government was committed to clearing legitimate legacy debts in a transparent and structured manner, reforms were also necessary to prevent the recurrence of such obligations.
The minister identified improvements in market policies, revenue assurance, reduction of technical and commercial losses, efficiency and accountability as critical to the success of the power-sector reforms.
He said the transaction also demonstrated the capacity of Nigeria’s domestic capital market to mobilise long-term financing for major economic interventions.
Oyedele, however, cautioned that the success of the programme should not be measured by the size of the bonds issued.
“Ultimately, the success of this programme will not be measured by the amount or size of bonds that we have issued. It will be measured by whether we achieve a financially sustainable electricity market that can attract investments, meet its obligations and deliver more reliable power to Nigerian households and businesses,” he said.
The Senior Special Adviser to the President on Energy, Olu Verheijen, represented at the ceremony by Iriye Onaguruwa, said the Series 2 transaction marked a significant expansion of the Presidential Power Sector Financial Reform Programme.
Verheijen recalled that an investor forum was held two months earlier to introduce the Series 2 issuance, adding that the signing ceremony represented the conclusion of the transaction process.
She said the programme was anchored on President Bola Tinubu’s objective of transforming the power sector from one plagued by accumulated debts and financial instability into a sustainable market capable of supporting reliable electricity supply.
According to her, the government had signed settlement agreements with 11 generation companies representing 21 power plants after negotiations and verification of outstanding debts.
She said Series 1, issued in January 2026, raised approximately ₦501 billion through cash and non-cash instruments.
With Series 2 now completed, Verheijen said the Federal Government had delivered more than ₦1.1 trillion under the ₦4 trillion programme approved by President Tinubu.
“Series 1 proved the model and Series 2 is scaling it,” she said.
She said the initiative was intended to restore confidence across the electricity value chain and unlock new investments in generation and other areas of the sector.
Verheijen said the government’s broader objective was to break the cycle of liquidity shortages and accumulated debts and create an environment capable of supporting increased investment and improved electricity supply to households, businesses and industries.
She commended the transaction advisers, issuing houses, legal advisers, trustees, registrars, investors and other stakeholders for their contributions to the successful completion of the Series 2 issuance.
She added that the debt-reduction programme, alongside other initiatives such as the Presidential Electricity Initiative, would support the Federal Government’s broader power-sector reform agenda.
