FG Embeds N4tn Electricity Bond in Budget Framework

The Federal Government has announced that the recently introduced power sector liquidity bond—created to settle long-standing debts owed to electricity generation companies—will be fully incorporated into Nigeria’s Medium-Term Expenditure Framework.
Officials say this strengthens the bond’s credibility and ensures repayment certainty as part of the ongoing debt-reduction programme for the electricity industry.

Government representatives and financial advisers disclosed the update during an investor forum focused on the bond issuance. The instrument, backed by a sovereign guarantee, is designed to inject liquidity into the power sector and stabilise the market after years of financial strain.

Advisers explained that including the bond within Nigeria’s fiscal framework elevates it to a statutory obligation. Investors were told not to compare it with past interventions, which often failed to address structural liquidity gaps.

The first tranche of the programme involves a N590bn issuance, part of a broader N4tn bond scheme managed by NBET Finance Company Plc, a special-purpose vehicle created to consolidate historic debts and assigned receivables between 2015 and 2025.
The initial tranche comprises N300bn in cash bonds to be sold to investors and N290bn in non-cash bonds directly allotted to generation companies.

Officials emphasised that the bond has a clearly defined purpose: restoring confidence and ensuring financial stability in the electricity value chain. The bonds carry a seven-year tenor, a fixed coupon rate, and an amortising repayment structure.

The Minister of Power said the reforms will be matched by stricter oversight of distribution companies, alongside a more targeted subsidy regime to ensure support reaches low-income consumers while those who can afford cost-reflective tariffs pay accordingly.

The Nigerian Bulk Electricity Trading’s acting managing director described the initiative as a strategic reset designed to rebuild liquidity and prepare the sector for new investment in generation, transmission, and distribution infrastructure.
More than 600 institutional investors joined the forum, signalling strong interest in the programme.