FG’s N501 Billion Power Sector Bond Fully Subscribed, Boosting Investor Confidence in Nigeria’s Electricity Market
The Federal Government of Nigeria has successfully achieved full subscription for its N501 billion inaugural power sector bond under the Presidential Power Sector Debt Reduction Programme (PPSDRP), signaling strong investor confidence in the country’s ongoing electricity market reforms. The announcement was made on Tuesday by Mrs. Olu Arowolo Verheijen, the Special Adviser to the President on Energy, via X (formerly Twitter).
The bond aims to address long-standing payment arrears owed to power generation companies, restore liquidity across the sector, and strengthen trust in the Nigerian Electricity Supply Industry (NESI). According to officials, the bond proceeds will fund the first and second instalments of legacy debt settlements, providing immediate cash flow relief to key power producers.
Industry leaders have welcomed the development as a “major reset” for Nigeria’s electricity market. Mrs. Verheijen emphasized that the Programme combines debt resolution with broader financial and structural reforms to encourage fresh investments. Mr. Kola Adesina, Group Managing Director of Sahara Power Group, noted that clearing historic arrears will boost investor confidence and enable the commencement of the second phase of projects like the Egbin Power Plant.
The Series 1 bond issuance, completed by NBET Finance Company Plc, raised N300 billion from the capital markets and allocated N201 billion in bonds to participating generation companies. Five major power producers—including First Independent Power Limited, Geregu Power Plc, Ibom Power Company Limited, Mabon Limited, and Niger Delta Power Holding Company Limited—have signed settlement agreements with Nigerian Bulk Electricity Trading Plc, covering N827.16 billion in phased payments for electricity supplied between February 2015 and March 2025.
By clearing these legacy debts, the initiative is expected to strengthen the balance sheets of generation companies, improve their operational and debt repayment capabilities, and support about 12.03 million active electricity customers nationwide. The Federal Government’s long-term plan includes issuing up to N4 trillion in government-backed bonds to settle historic obligations, a move that is projected to stabilize the sector and encourage sustainable investment in Nigeria’s power infrastructure.
source: nairametrics