- Nigeria has issued its first power sector bond worth ₦501 billion to clear legacy debts and stabilise the electricity market.
- The fully subscribed bond signals strong investor confidence and supports ongoing power sector reforms.
Nigeria has taken a major step to address long-standing financial challenges in its power sector by issuing its first power sector bond worth ₦501 billion. The government launched the bond under the Presidential Power Sector Debt Reduction Programme to stabilise the electricity market. The move shows strong federal commitment to fixing structural problems that have affected power generation and supply for years.
Meanwhile, the market fully subscribed to the bond. Pension funds, commercial banks, and asset management firms participated in the issuance. Their participation shows growing investor confidence in Nigeria’s power sector reforms. The programme operates through NBET Finance Company Plc, which the government created as a special purpose vehicle to manage the process and ensure transparent settlement of outstanding payments.
The bond will help clear legacy debts that have burdened the Nigerian Electricity Supply Industry for more than a decade. Generation companies have faced financial strain because market operators did not fully pay them for electricity supplied to the grid. These unpaid obligations weakened cash flow and limited investment in plant maintenance and upgrades. The programme will settle verified arrears owed to generation companies between 2015 and 2025.
Major power producers, including Geregu Power and Niger Delta Power Holding Company, have signed participation agreements. The first group of companies will receive more than ₦827 billion in total payments. The government will release the funds in phases. This first bond will cover the first two payment instalments.
Industry experts say debt settlement could reset the electricity market. Improved cash flow will allow generation companies to maintain plants, repair ageing equipment, and increase output. These improvements could reduce outages and improve electricity reliability nationwide.
The bond also shows Nigeria can use its domestic capital market to finance critical infrastructure. The government now attracts private investment through structured financing instead of relying only on public spending. Analysts say this approach could strengthen the sector’s financial foundation and support long-term improvements in electricity generation and distribution.