The Federal Government has successfully raised ₦501 billion in its inaugural bond issuance dedicated to clearing over a decade of accumulated debts in the power sector.
The historic move has seen 14 power plants sign settlement agreements, marking a turning point for electricity generation in Nigeria.
The bond, issued under the Presidential Power Sector Debt Reduction Programme, achieved a 100 percent subscription rate, drawing strong participation from pension funds, banks, and asset managers.
Speaking at the signing ceremony in Lagos on Tuesday, the Special Adviser to the President on Energy, Mrs. Olu Arowolo Verheijen, disclosed that the inaugural tranche comprises ₦300 billion raised from the capital market and an additional ₦201 billion in bonds allocated directly to power generation companies (GenCos).
The programme targets 14 power plants operated by five major GenCos. These companies are being paid for electricity supplied between February 2015 and March 2025.
The affected companies; First Independent Power Limited, Geregu Power Plc, Ibom Power Company Limited, Mabon Limited, and the Niger Delta Power Holding Company Limited (NDPHC) represent a combined generation capacity of 4,483.60 megawatts.
They have all executed debt settlement agreements with the Nigerian Bulk Electricity Trading Plc (NBET).
Reacting to the development, Mr. Kola Adesina, Group Managing Director of Sahara Power Group (which operates five plants including Egbin Power), stated that the settlement would restore investor confidence and unlock stalled projects.
“Capital formation can only come when there is confidence, when you can truly see a line of sight in recovering investments previously made,” Adesina noted.
He announced that with this settlement, construction would commence immediately on the second phase of the 1,320-megawatt Egbin Power Plant.
Mrs. Verheijen revealed that the total negotiated settlement under the programme stands at ₦827.16 billion, which will be paid in four instalments.
The proceeds from this Series 1 bond issuance will fund approximately 50 percent of the obligations (estimated at ₦421.42 billion) through a mix of cash payments and promissory notes.
Nigeria’s power sector has long been crippled by liquidity challenges, with GenCos struggling to maintain equipment or secure fuel due to unpaid invoices, a situation that has fueled chronic power shortages despite the country’s vast gas reserves.
CardinalStone Partners Limited acted as the lead financial adviser and issuing house for the transaction, with NBET serving as the sponsor. The initiative is also backed by the Debt Management Office, the Central Bank of Nigeria, the National Pensions Commission, and the Nigerian Revenue Service.
Mrs. Verheijen reaffirmed the Tinubu administration’s commitment to a disciplined implementation of the programme, encouraging additional GenCos to participate in subsequent tranches as the government works to stabilize the grid and attract fresh capital.