The Federal Government has announced that the newly launched N4tn power sector liquidity bond, designed to settle long-standing debts owed to electricity generation companies, will be fully captured in the country’s Medium-Term Expenditure Framework (MTEF). Officials say this move strengthens the bond’s credibility, guarantees repayment, and formally integrates it into Nigeria’s fiscal planning. The development also adds N4tn to the nation’s public debt.
Speaking at a virtual investor forum convened by the Ministries of Finance and Power, financial advisors and government officials emphasized that the sovereign-backed debt instrument is central to the Presidential Power Sector Debt Reduction Programme. Michael Nzewi, Group Managing Director of CardinalStone Partners, stressed that this bond differs from previous interventions, as its inclusion in the MTEF elevates it to a statutory government obligation. “The government has stepped in with a guarantee to cover any shortfalls,” Nzewi assured prospective investors.
The bond’s first tranche, launched earlier this week at N590bn, is part of a wider N4tn NBET Finance Company Plc Bond Programme. It includes N300bn in cash bonds issued to the market and N290bn in non-cash bonds allotted directly to generation companies. The seven-year Series 1 bond, to be issued between November and December 2025, will be redeemed on a fixed-rate, amortizing basis with semi-annual payments, ensuring liquidity flows into the power sector and laying the foundation for its next phase of development.
Experts highlighted that the bond is issued through NBET Finance Company Plc, a special-purpose vehicle designed to ring-fence historical liabilities and receivables. This SPV structure creates a stand-alone entity responsible for the transaction, improving transparency and investor confidence. Minister of Power, Adebayo Adelabu, added that distribution companies will also see enhanced oversight, while targeted subsidies will continue for low-income households, ensuring that the reform balances financial sustainability with social responsibility.
Johnson Akinnawo, Acting MD of NBET, described the programme as a “strategic reset” rather than another bailout, noting that the sovereign guarantee provides the stability investors need. The forum, attended by over 600 institutional investors, officially launched the Presidential Power Sector Debt Reduction Programme, aiming to clear debts, stabilise cash flow, and attract fresh investment into Nigeria’s electricity generation, transmission, and distribution infrastructure. By attaching the bond to the MTEF, the government has provided greater repayment certainty, transparency, and credit quality, addressing long-standing investor concerns.
source: punch