The Federal Government has successfully raised N501 billion through its inaugural bond issuance for electricity generation companies (Gencos) under the Presidential Power Sector Debt Reduction Programme (PPSDRP), marking a major step toward resolving long-standing liquidity challenges in Nigeria’s power sector.
The bond, which recorded 100 per cent subscription, attracted strong interest from pension funds, banks, asset managers and other institutional investors, signalling renewed confidence in government-led power sector reforms.
Speaking at the signing ceremony in Lagos, the Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, said the overwhelming market response reflected growing trust in the government’s commitment to stabilising the electricity value chain, restoring liquidity and attracting long-term private capital.
Edun, who was represented by the Director-General of the Debt Management Office (DMO), Ms. Patience Oniha, described the bond issuance as more than a financing transaction, noting that it marked a turning point in efforts to address structural weaknesses that have plagued the power sector for over a decade.
Under the programme, five power generation companies have signed Final Settlement Agreements (FSAs) with the Nigerian Bulk Electricity Trading Company (NBET), covering verified legacy debts totalling N827.16 billion.
The obligations would be settled in four instalments, with proceeds from the bond funding the first two phases.
The PPSDRP, initiated by the administration of President Bola Tinubu, was designed to clear over N4 trillion in accumulated debts owed to Gencos, which had constrained liquidity, weakened balance sheets and discouraged investment across the electricity value chain.
Edun said resolving these liabilities was critical to restoring financial discipline and confidence in the market.
He noted that settling the debts would enable Gencos to stabilise operations, improve plant maintenance and attract fresh investment, all of which are essential to delivering more reliable electricity nationwide.
“This intervention sends a clear signal that the federal government is committed to honouring its obligations and deploying innovative financial solutions to resolve systemic challenges in the power sector,” he said.
Also speaking, Special Adviser to the President on Energy, Ms. Olu Verheijen, described the programme as a comprehensive reset of the electricity market, combining debt resolution with broader financial and operational reforms.
She disclosed that the Series 1 bond issuance, executed through NBET Finance Company Plc, comprised N300 billion raised from the capital market and N201 billion allotted directly to participating Gencos.
The seven-year bonds are fully guaranteed by the federal government.
Verheijen explained that the programme was not intended as a bailout, but as a balance-sheet reset aimed at clearing verified obligations, restoring liquidity and re-establishing commercial viability across the sector.
According to her, five Gencos—First Independent Power Limited, Geregu Power Plc, Ibom Power Company Limited, Mabon Limited and Niger Delta Power Holding Company—representing 14 power plants, have executed settlement agreements so far.
However, some major plants, including Egbin, Transcorp and Shiroro Hydro, are yet to sign on.
She added that improved liquidity would strengthen payment certainty to gas suppliers, enhance plant availability and create room for new investment.
Distribution companies, she said, would also face clearer performance expectations as financial stability improves.
The Acting Managing Director of NBET, Mr. Johnson Akinnawo, said the bond issuance would significantly improve liquidity across the power value chain and unlock renewed investment in the sector.
He assured stakeholders that NBET would ensure transparent deployment of the proceeds.
Industry players also welcomed the development.
Mr. Kola Adesina, Group Managing Director of Sahara Power Group, said clearing historical debts would restore investor confidence and enable expansion projects, including plans to commence a second phase at the Egbin Power Plant.
When fully implemented, the programme is expected to impact over 4,483MW of generation capacity and settle payments for more than 290,000 GWh of electricity supplied since 2015, benefiting over 12 million registered customers nationwide.
However, optimism around the bond issuance was dampened by another disruption to electricity supply, as the national grid experienced a system disturbance on Tuesday morning, triggering widespread outages across the country.
Distribution companies, including Eko, Abuja and Port Harcourt Discos, confirmed the outage, although the Nigerian Independent System Operator (NISO) later clarified that the incident was a partial system collapse caused by a voltage disturbance from the Gombe Transmission Substation and was subsequently resolved.
Reacting to the development, the Lagos Chamber of Commerce and Industry (LCCI) expressed deep concern over the recurrence of grid failures, calling for an independent forensic audit of the national grid.
In a statement, LCCI Director-General Dr. Chinyere Almona warned that repeated grid disruptions pose a serious threat to businesses, manufacturers and economic recovery, urging the government to treat grid stability as an economic emergency rather than a purely technical issue.
Despite the setback, the federal government maintained that the power bond programme represents a critical foundation for long-term sector sustainability, improved reliability and economic growth.
