By Amofokhai Williams
In a decisive move to resuscitate the nation’s beleaguered electricity sector, the Federal Government has successfully issued an inaugural ₦501 billion bond, recording 100% subscription from domestic institutional investors.
The transaction marks the critical first step in the Presidential Power Sector Debt Reduction Programme (PPSDRP), a flagship initiative designed to clear over a decade of legacy debts owed to power generation companies (GenCos).
The bond issuance, which closed on Tuesday, saw strong demand from pension funds, banks, and asset managers, signalling restored investor confidence in the government’s reform agenda and the Nigerian Electricity Supply Industry (NESI). The Series 1 issuance comprises ₦300 billion raised from the capital markets and ₦201 billion in bonds allotted directly to participating GenCos.
At a signing ceremony in Lagos, the Special Adviser to the President on Energy, Olu Arowolo Verheijen, described the programme as a “decisive reset of the electricity market.”
The initiative aims to resolve payment arrears for electricity supplied between February 2015 and March 2025, a chronic liquidity crisis that has crippled GenCos’ balance sheets and stifled new investment for years.
“The Federal Government reaffirms its commitment to disciplined implementation of the Programme,” Verheijen stated. “We look forward to the participation of other power generation companies, as part of our broader reforms aimed at building a financially sustainable electricity market.”
To date, five generation companies—First Independent Power Limited (FIPL), Geregu Power Plc, Ibom Power, Mabon Limited, and the Niger Delta Power Holding Company (NDPHC)—operating fourteen plants nationwide, have executed Settlement Agreements totalling ₦827.16 billion. These will be paid in four phased instalments.
The proceeds from this first bond will fund approximately 50% of the total settlement (₦421.42 billion) for these companies via a mix of cash and notes, providing immediate liquidity relief.
The impact is already catalysing future plans. Mr. Kola Adesina, Group Managing Director of Sahara Power Group, revealed that the resolution has unlocked stalled expansion projects.
“Because we were being owed so much, it was a problem to put in more money,” Adesina said. “I can say that once this process is over, construction will commence immediately on the second phase of our Egbin Power Plant.”
The programme’s completion will finalise settlement for 290,644.84 Gigawatt-hours of electricity supplied since 2015, impacting 4,483.6 MW of generation capacity that serves over 12 million registered customers. By converting verified receivables into transparent capital market financing, the government reinforces fiscal discipline and aims to strengthen the entire power value chain.
The Special Adviser acknowledged the leadership of President Bola Ahmed Tinubu and the collaborative efforts of the Ministers of Finance and Power, Wale Edun and Adebayo Adelabu, respectively. She also credited key agencies like the Debt Management Office, Central Bank of Nigeria, and the professional consortium led by CardinalStone Partners Limited, which acted as Lead Financial Adviser.
Analysts see the bond’s full subscription as a vital vote of confidence. The government now faces the task of ensuring disciplined implementation of subsequent phases and broader complementary reforms, including tariff transparency and grid infrastructure improvements.
If sustained, this financial intervention could mark a turning point, unlocking the investment needed to enhance generation capacity and, ultimately, provide more reliable power to Nigeria’s homes and industries—a foundational requirement for the nation’s long-term economic growth.
