FG to Launch ₦1.23 Trillion Power Sector Bond to Clear GENCOs’ Debt and Restore Market Confidence
The Federal Government of Nigeria has concluded plans to launch a ₦1.23 trillion Power Sector Bond as part of a wider ₦4 trillion debt programme aimed at restoring liquidity and stabilising Nigeria’s electricity market. The initiative is expected to address long-standing payment arrears owed to power generation companies (GENCOs) and help rebuild investor confidence in the sector.
The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, disclosed this at an investor forum organised by the Presidential Power Sector Debt Reduction Committee (PPSDRC) ahead of the Phase 1 issuance. He said the bond is backed by a full sovereign guarantee, underscoring the government’s commitment to resolving legacy obligations in the Nigerian Electricity Supply Industry.
The forum, hosted by Nigerian Bulk Electricity Trading Plc (NBET) in collaboration with CardinalStone Partners Limited, attracted more than 650 participants. Pension fund administrators, asset managers, banks, insurance firms, trustees, and high-net-worth individuals attended, with many indicating strong interest in the offer.
As of June 2025, the Federal Government reportedly owed GENCOs about ₦6 trillion in unpaid electricity subsidies. To manage the growing liability, officials have been engaging generation companies on debt restructuring, including proposals that would see them forfeit up to 50 per cent of the outstanding amount. According to Edun, the bond has been structured to global best practices, qualifies for liquidity status with the Central Bank of Nigeria, and has secured exemption from the National Pension Commission, making it attractive to long-term institutional investors.
The Finance Minister stressed that the administration prefers market-based financing over money printing, describing the programme as a transparent and disciplined approach to funding. Supporting this view, Special Adviser to the President on Energy, Mrs. Olu Verheijen, said the bond marks a critical first step in broader power sector reforms, while NBET’s Acting Managing Director, Johnson Akinnawo, described it as a “strategic reset” rather than a bailout—one designed to lay the foundation for a more efficient and self-sustaining electricity market.
source: vanguard