FG Taps Capital Markets for N729bn Power Sector Debt Resolution, Signalling Renewed Investor Confidence
The Nigerian federal government is actively courting investment in the power sector, preparing to issue a second series of bonds totalling approximately N729 billion. This significant issuance is earmarked to settle verified legacy debts owed to electricity generation companies (GenCos), a move building on the success of an inaugural N501 billion bond launched in January 2026 under the Presidential Power Sector Debt Reduction Programme (PPSDRP). The programme aims to resolve long-standing fiscal distortions, restore liquidity, and bolster confidence within the Nigerian Electricity Supply Industry (NESI).
Speaking at the Project HOOVER Series II Investment Forum in Abuja, the Minister of Power, Joseph Tegbe, articulated the government’s vision, framing the bond issuance as a critical mechanism for transforming historical liabilities into bankable investment opportunities. He extended a direct invitation to financial market participants to increase their exposure to a sector undergoing substantial reform. The Minister specifically acknowledged the instrumental roles of the Nigerian Bulk Electricity Trading Plc (NBET) and the Debt Management Office (DMO) in providing technical stewardship and driving market-based reforms, alongside the financial advisers and transaction partners whose structuring expertise has yielded an instrument aligned with market expectations.
Olu Verheijen, Special Adviser to the President on Oil and Gas, underscored the administration’s commitment to consistent action as the driver of investor confidence. She highlighted the government’s decisive approach to dismantling the fiscal dysfunctions that have historically hampered the power sector, stating, “We are converting yesterday’s liabilities into today’s liquidity and tomorrow’s investment capacity.” This sustained liquidity, she explained, is crucial for strengthening the electricity value chain, enhancing operational performance, and rebuilding market trust.
Finance Minister and Coordinating Minister of the Economy, Taiwo Oyedele, emphasised that the bond issuance transcends mere capital raising, representing a strategic effort to build trust, honour commitments, and address legacy challenges structurally. He referenced the fully subscribed N501 billion maiden NBET Power Sector Bond, which was subsequently listed on the FMDQ Exchange and the Nigerian Exchange Group. The timely settlement of coupon and principal payments on July 14, 2026, served as concrete evidence of the programme’s robust governance and institutional backing, with key institutions including the Debt Management Office, the Central Bank of Nigeria, the National Pension Commission, the Nigerian Revenue Service, and NBET providing support.
The persistent liquidity gap in the power sector, attributed to tariff shortfalls, settlement issues within the bulk electricity trading framework, accumulated debts to GenCos and suppliers, and grid instability, has been a decade-long challenge. Minister Oyedele noted that these structural problems necessitate market-based solutions and coordinated settlement mechanisms, rather than solely relying on budget reallocations. A comprehensive review of sector liabilities, authorised by President Tinubu in July 2024, led to the establishment of a Presidential Power Sector Debt Reduction Committee, which verified liabilities and designed the current sustainable resolution framework, receiving Federal Executive Council approval in August 2024.
NBET officials reiterated that the bond issuance validates the proposition that verified legacy power sector debt can be transparently resolved through disciplined capital market instruments. Johnson Akinnawo, acting managing director/CEO of NBET, confirmed that the N501 billion Series I bond successfully demonstrated this concept, improved liquidity, and restored investor trust. He assured that the upcoming N729 billion Series II issuance will maintain the same level of discipline and rigour, underscoring the commitment to integrity in stewarding raised capital. The Series II offering, expected to be listed following its issuance, aims to settle verified legacy obligations to GenCos, thereby removing a significant impediment to investment and operational efficiency. The success of this bond will be a key indicator of market confidence in Nigeria’s capacity to convert liabilities into sustainable, long-term investment.
