The federal government will soon issue a fresh N729 billion bond to settle verified legacy debts owed to electricity generation companies (GenCos), marking another major step in its plan to restore liquidity and financial stability across Nigeria’s power sector.
The bond forms the second tranche of the first phase of the N4 trillion Presidential Power Sector Debt Reduction Programme and follows the successful issuance of about N501 billion in January 2026. Combined, both issuances make up the N1.23 trillion Series 1 and Series 2 components of the Capital Market Multi-Instrument Issuance Programme.
The initiative is part of the federal government’s broader strategy to clear longstanding payment obligations in the Nigerian Electricity Supply Industry (NESI), strengthen investor confidence and improve the financial health of the electricity value chain.
The chief executive of the Nigerian Bulk Electricity Trading Plc (NBET), Mr Johnson Akinnawo, said the forthcoming bond issuance represents the first phase of the wider N4 trillion programme approved by President Bola Tinubu to address verified legacy liabilities in the power sector.
“The second issuance demonstrates the Federal Government’s commitment to resolving verified legacy obligations through a transparent, structured and market-based mechanism,” Mr Akinnawo said.
He explained that the January 2026 bond issuance reflected the government’s fiscally responsible approach to settling outstanding obligations owed to GenCos while improving liquidity within the electricity market and strengthening the long-term sustainability of the sector.
According to him, the new bond will further reinforce confidence among investors and provide much-needed financial relief to market participants whose operations have been constrained by accumulated debts.
“By improving liquidity across the electricity value chain, the programme will help strengthen the financial position of market participants, support new investment and promote sustainable electricity generation for the benefit of Nigerians,” he stated.
Mr Akinnawo recalled that the Federal Executive Council (FEC) approved the establishment of the N4 trillion Presidential Power Sector Debt Reduction Programme in 2025, with NBET designated as the sponsoring institution responsible for coordinating the settlement of verified legacy obligations across the electricity industry.
He explained that the debt reduction programme is being implemented through multiple issuances of debt instruments by NBET Finance Company Plc, a Special Purpose Vehicle (SPV) established specifically to execute the programme.
According to him, the debt instruments are backed by the full faith and credit of the federal government and supported by comprehensive risk mitigation measures designed to ensure successful implementation and attract investor participation.
“The programme has the full backing of the federal government and incorporates a robust suite of instruments designed to mitigate transaction risks and support successful execution,” the NBET boss said.
He noted that the issuance of the approximately N729 billion bond would represent another decisive milestone in resolving longstanding financial obligations that have weighed on the electricity market for years.
Mr Akinnawo added that clearing the outstanding debts would strengthen the financial position of electricity generation companies, improve liquidity throughout the power value chain and create a more stable, bankable and investment-friendly electricity market capable of supporting Nigeria’s economic growth and expanding reliable electricity supply.
