The Nigerian government added N729 billion in power sector bonds

The Federal Government has raised N728.979 billion through the second issuance under the N4tn Power Sector Multi-Instrument Issuance Program, bringing the value of bonds issued in the first phase of this initiative to about N1.23tn.

This latest issuance aims to resolve verified debts owed to power generation companies, whose unpaid claims have weakened liquidity and restricted investment in the power sector.

The Series 2 bonds follow the successful completion of the Series 1 initial issuance of N501.021 billion in January 2026. The first bonds recorded 100 per cent subscription, with N300 billion raised from the capital market and N201.021 billion issued as non-cash bonds to participating generation companies.

The latest transaction consisted of N402 billion cash bonds raised from the capital market and N326.979 billion non-cash bonds allocated to participating GenCos under the Presidential Power Sector Debt Reduction Programme.

Speaking at a signing ceremony in Abuja on Monday, Minister of Finance and Coordinating Minister for the Economy, Taiwo Oyedele, said the transaction was designed to address legacy liabilities that have weakened the electricity market.

He said, “This transaction addresses an important challenge in the Nigerian electricity market, namely the accumulation of legacy liabilities that have weakened liquidity, restricted investment, and affected confidence across the value chain.

“The federal government’s goal is to resolve legitimate legacy obligations in a structured and transparent manner, while implementing the necessary reforms to prevent their recurrence.”

Oyedele warned that the bond program must be supported by reforms capable of preventing the accumulation of new debt, and stressed that the government’s goal is to build a financially sustainable electricity market.

“This means the bond program cannot stand alone, but must be accompanied by stronger market discipline, better revenue guarantees, reduced technical and commercial losses, increased efficiency and accountability throughout the electricity ecosystem.

“It is also important for us to leverage Nigeria’s domestic capital markets. This shows how the government can use the right market instruments to address significant economic challenges, while deepening our financial markets and mobilizing long-term domestic capital,” he said.

The Minister added that the success of this program is not measured by the amount of funds collected, but by its impact on electricity supply and the ability of market players to fulfill their obligations.

Chief Executive Officer of Nigerian Bulk Electricity Trading Plc, Akinola Odeyemi, said the Series 2 bonds have an aggregate value of N728.979 billion and will be implemented in two phases, Phase A and Phase B.

He revealed that 11 power generation companies participated in the second phase, compared to eight GenCos in Series 1. Odeyemi said the increased participation reflected growing confidence in the program and its ability to provide a credible framework to address outstanding verified obligations in the power sector.