Nigeria’s electricity industry is set for a financial reset with the Federal Government issuing a ₦501.02 billion bond to settle long-standing debts owed to power generation companies (GenCos) and gas suppliers. The move is part of a larger ₦4 trillion Presidential Power Sector Debt Reduction Programme approved by President Bola Tinubu.
The bond, managed through Nigerian Bulk Electricity Trading Plc (NBET), is the first series under an initial ₦1.23 trillion approval. It is split into two seven-year tranches worth ₦300 billion and ₦201.02 billion, both priced at 17.5% and backed by a full Federal Government guarantee. The funds are intended to provide immediate liquidity to the generation segment, helping GenCos settle unpaid invoices and resume operations at full capacity.
For years, Nigeria’s power sector has struggled with unpaid bills, inconsistent gas supply, and tariffs below production costs. Subsidies meant to fill the gap have often been delayed, leaving companies with mounting debts. Between May and October 2025 alone, 25 GenCos billed over ₦1.5 trillion but received only about 36% of that. Outstanding obligations in the sector now exceed ₦6 trillion.
According to the Minister of Power, Adebayo Adelabu, the bond is part of efforts to stabilise the electricity market, improve investor confidence, and move the sector toward long-term commercial viability. A previous tranche issued earlier in the year was oversubscribed, signaling strong investor interest. A targeted subsidy framework is also being developed to protect vulnerable households.
The bond is expected to immediately restore gas supply to thermal plants, improve maintenance schedules, increase plant availability, and reduce power outages. Several GenCos, including Geregu Power Plc and Niger Delta Power Holding Company Limited, have already signed settlement agreements under the programme.
The bond also offers opportunities for institutional investors, qualifying for pension fund participation and recognised by the Central Bank of Nigeria for liquidity purposes. Experts say this could attract fresh capital into the sector once legacy debts are cleared.
While the intervention is a major step, challenges remain. Transmission bottlenecks, inadequate tariffs, and the need for fully funded subsidies still limit the impact on electricity supply.
Nevertheless, the ₦501 billion bond is seen as a critical step toward restoring liquidity, rebuilding confidence, and setting the stage for broader reforms in Nigeria’s electricity market.
With improved funding, the government believes Nigeria can gradually achieve more stable and reliable power supply, paving the way for long-term growth in the sector.
