FG’s N501 Billion Power Sector Bond Records Full Subscription

The Federal Government has achieved full subscription of its N501 billion inaugural power sector bond issued under the Presidential Power Sector Debt Reduction Programme, signalling renewed investor confidence in Nigeria’s electricity market reforms.

The bond issuance is designed to address long-standing payment arrears owed to power generation companies, restore liquidity across the sector, and strengthen confidence in the Nigerian Electricity Supply Industry.

Officials explained that the issuance forms part of broader reforms aimed at stabilising the power market and unlocking fresh investments after years of liquidity constraints and financial strain within the sector.

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The Series 1 Power Sector Bond was completed by NBET Finance Company Plc and closed at N501 billion, comprising N300 billion raised from the capital market and N201 billion allotted to participating generation companies. Proceeds from the issuance will be used to fund the first and second instalments of settlement payments under the programme.

Under the debt reduction framework, verified receivables for electricity supplied between February 2015 and March 2025 are being settled through negotiated agreements with generation companies. Five power producers have already executed settlement agreements with Nigerian Bulk Electricity Trading Plc, with the negotiated settlement amount standing at N827.16 billion to be paid in four phased instalments.

The initial payments, estimated at N421.42 billion and representing about half of the total settlement, will be made through a combination of cash and financial instruments. This structure is expected to ease immediate liquidity pressures on generation companies and strengthen their balance sheets.

By clearing historic arrears, the programme is projected to improve the ability of power producers to meet operating and debt obligations, support electricity generation capacity of over 4,400 megawatt-hours per hour, and enhance service delivery to more than 12 million registered electricity customers nationwide. The government said the initiative also reinforces fiscal discipline through validated claims, negotiated settlements, and transparent capital market financing.