The Federal Government has taken a major step toward resolving the long-running financial strain in Nigeria’s electricity industry by launching the first tranche of a ₦4tn bond programme aimed at settling debts owed to power generation companies.
The opening tranche, valued at ₦590bn, is part of the new NBET Finance Company Plc Bond Programme designed to ease liquidity pressure on GenCos and stabilise the power supply chain. Of the amount, ₦300bn will be offered to the investing public as cash bonds, while ₦290bn will be issued to GenCos as non-cash instruments on the same terms.
According to details contained in the programme documents, the Series 1 issuance will run between November and December 2025. The bond carries a seven-year tenor with a fixed coupon rate, and interest will be paid twice annually. Repayment of the principal will be done gradually over the life of the instrument.
CardinalStone Partners Limited is leading the issuance as the financial adviser and book runner.
The bond will be listed on both the Nigerian Exchange and the FMDQ Securities Exchange, allowing participation from pension fund managers, banks, asset managers, insurance firms and high-net-worth investors. It is backed by the full guarantee of the Federal Government and recognised by the Central Bank of Nigeria as a liquid asset.
The structure of the offer also allows the issuer to absorb oversubscription of up to ₦1.23tn, which could pave the way for additional non-cash bond allocations to GenCos during the first phase of the programme. Pricing will be determined through a book-build process and will track the yield of the seven-year Federal Government bond plus a defined spread. Minimum subscription is pegged at ₦5m.
Proceeds from the bond will be deployed specifically to settle outstanding obligations owed to GenCos. Industry operators have repeatedly warned that the unresolved debt—estimated at about ₦4tn and expected to rise to nearly ₦6tn by the end of the year—continues to weaken their operations, disrupt gas supply agreements, and reduce generation capacity. These financial pressures contribute to recurring national grid collapses and poor electricity output across the country.
The Federal Government expects the bond programme to ease the long-standing liquidity crunch in the sector. Repayments will be funded mainly through annual budgetary provisions, with NBET’s collections from distribution companies serving as a secondary source.
Officials say the initiative is one of the Tinubu administration’s most decisive interventions in the sector and is expected to improve confidence among investors, gas suppliers and power generators, ultimately supporting efforts to deliver more reliable electricity to Nigerian homes and businesses.
