Nigeria’s Federal Government has wrapped up plans for a N1.23 trillion bond issuance targeting the power sector, within a comprehensive N4 trillion debt reduction framework intended to enhance market liquidity, promote stability in electricity supply, and rebuild investor confidence.
Nigeria’s Minister of Finance and Coordinating Minister of the Economy, Wale Edun, addressed participants at a recent investor forum organized by the Presidential Power Sector Debt Reduction Committee (PPSDRC) in collaboration with transaction advisers.
The event was held ahead of the Phase 1 issuance of a government-backed bond aimed at settling legacy debts in the power sector, with the instrument carrying a full sovereign guarantee from the Federal Government.
A recent investor forum hosted by the Nigerian Bulk Electricity Trading Plc (NBET) and CardinalStone Partners Limited drew over 650 participants, including pension fund administrators, asset managers, banks, insurance companies, trustees, and high-net-worth individuals. Many attendees expressed keen interest in subscribing to the upcoming government-backed bond aimed at settling legacy debts in the power sector.
The forum highlighted the Federal Government’s ongoing efforts to address approximately N6 trillion in unpaid electricity subsidies owed to power generation companies (GenCos) as of mid-2025. To ease this burden, officials have been negotiating with GenCos, pressing them to accept settlements covering about 50% of the outstanding amounts through the bond programme.
Finance Minister Wale Edun, speaking at the event, described the bond as meticulously designed to align with global best practices and appeal to long-term institutional investors, especially pension funds. He noted that the instrument has been granted Central Bank of Nigeria (CBN) liquidity status and received an exemption from the National Pension Commission (PenCom), rendering it eligible for investment by pension fund administrators.
“This initiative strengthens market transparency, fosters competition, and empowers the private sector, which drives about 90% of the economy,” Edun said.
He reiterated the administration’s dedication to fiscal discipline, emphasising a preference for market-based financing over printing money or unsustainable borrowing. “The government’s commitment is to transparency, fiscal responsibility, and disciplined financial management—coming to the market rather than printing money or exploring other ways of raising necessary funds,” he added.
The bond forms part of the Presidential Power Sector Debt Reduction Program, approved earlier in 2025, which authorizes up to N4 trillion in issuances to resolve longstanding liabilities crippling the sector. The first phase targets raising funds in late 2025 and early 2026, with strong participation signaling investor confidence in the reforms.
Finance Minister Wale Edun has described the newly launched Power Sector Bond Programme as a groundbreaking initiative designed to settle longstanding debts in the Nigerian Electricity Supply Industry (NESI) while establishing the groundwork for a more efficient and financially self-sustaining electricity market.
Speaking at an investor forum, Edun emphasized that the program represents a first-of-its-kind effort in Nigeria, targeting the resolution of accumulated liabilities that have long hampered the sector’s performance and deterring private investment. By addressing these legacy issues through structured bond issuances, the government aims to foster greater stability, attract sustained funding, and transition the power market toward greater independence from subsidies.
The Special Adviser to the President on Energy, Mrs. Olu Verheijen, described the bond programme as a vital initial step in the government’s wider power sector reform agenda.
She emphasised that clearing existing debts must go hand-in-hand with financial and structural changes to avoid the accumulation of fresh liabilities.
Meanwhile, the Acting Managing Director of Nigerian Bulk Electricity Trading Plc (NBET), Mr. Johnson Akinnawo, characterised the initiative as a “strategic reset” for the sector, rather than a mere bailout.
“This is not a bailout. It is a strategic reset,” Akinnawo stated.
He added poetically: “The sovereign guarantee of the Federal Government is the unwavering sunlight and water that ensures this planting will grow into a forest of opportunities, powering industries, homes and dreams.”
