The Federal Government has recorded a full subscription for its N501 billion inaugural power sector bond issued under the Presidential Power Sector Debt Reduction Programme (PPSDRP), signalling strong investor confidence in ongoing electricity market reforms.
The development was disclosed in a statement issued on Tuesday by the Special Adviser to the President on Energy, Mrs. Olu Arowolo Verheijen, via X (formerly Twitter).
The bond issuance is aimed at addressing long-standing payment arrears owed to power generation companies, restoring liquidity across the sector and strengthening confidence in the Nigerian Electricity Supply Industry (NESI).
The issuance follows years of liquidity challenges in the power sector and forms part of the broader FG’s reforms to stabilise the electricity market and unlock new investments.
What they are saying
Mrs. Verheijen said the Programme represents a major reset of Nigeria’s electricity market, combining debt resolution with wider financial and structural reforms.
She stated that the Programme represents a decisive reset of the electricity market, combining debt resolution with broader financial and structural reforms.
Mr. Kola Adesina, Group Managing Director of Sahara Power Group, said: “Capital formation can only come when there is confidence, when you can truly see a line of sight in recovering investments previously made.”
He added, “Once this process is over, construction will commence immediately on the second phase of our Egbin Power Plant.”
According to stakeholders, clearing legacy debts is expected to restore confidence among investors and encourage fresh capital into power generation and related infrastructure.
More insights
The Series 1 Power Sector Bond Issuance was completed by NBET Finance Company Plc, closing at N501 billion, made up of N300 billion raised from the capital markets and N201 billion in bonds allotted to participating power generation companies.
Under the PPSDRP, verified receivables for electricity supplied between February 2015 and March 2025 are being settled through negotiated agreements with generation companies.
- Five power generation companies — First Independent Power Limited, Geregu Power Plc, Ibom Power Company Limited, Mabon Limited and Niger Delta Power Holding Company Limited — have executed settlement agreements with Nigerian Bulk Electricity Trading Plc.
- The negotiated settlement amount for the five companies stands at N827.16 billion, to be paid in four phased instalments.
- Proceeds from the Series 1 bond will fund the first and second instalments, estimated at N421.42 billion, representing about 50% of the total settlement.
The initial payments will be made through a mix of cash and notes, easing immediate liquidity pressures on the companies.
By clearing historic arrears, the Programme is expected to strengthen the balance sheets of power generation companies and improve their ability to meet operating and debt obligations.
- The Programme is projected to impact 4,483.60 megawatt-hours per hour of electricity generation capacity across Nigerian GenCos.
- It will finalise settlement for 290,644.84 gigawatt-hours of electricity billed since February 2015.
- The reforms are expected to support companies serving about 12.03 million active registered electricity customers nationwide.
The Federal Government said the initiative also reinforces fiscal discipline through validated claims, negotiated settlements and transparent capital market financing.
What you should know
In December, Nairametrics reported that the Federal Government issued the first bond under the Presidential Power Sector Debt Reduction Programme, marking a major step toward resolving payment arrears in Nigeria’s electricity industry.
- The government plans to issue up to N4 trillion in government-backed bonds to settle legacy debts owed to electricity generation companies and gas suppliers.
- The strategy has triggered concerns in some quarters over a potential debt-for-debt risk.
- However, officials insist the approach will stabilise the power sector and support long-term economic growth.
