Africa Finance Corporation (AFC) said it acted as co-financial adviser on the successful issuance of the inaugural tranche of bonds under the Federal Government of Nigeria’s Presidential Power Sector Financial Reforms Programme (PPSFRP).
The corporation disclosed this in a statement issued on Tuesday, February 3.
According to AFC, the first tranche of the bond, valued at ₦501 billion, marks a key milestone in the implementation of the ₦4 trillion Power Sector Bond Programme, which is aimed at resolving long-standing legacy debts in Nigeria’s electricity supply industry.
Pinnacle Daily earlier reported that the Federal Government issued the ₦501 billion bond to settle decade-old debts owed to GenCos, with the total negotiated settlement amount put at ₦827.16 billion.
The programme is overseen by the Presidential Power Sector Debt Reduction Committee (PPSDRC), with technical leadership provided by the Office of the Special Adviser to the President on Energy.
It is being implemented through Nigerian Bulk Electricity Trading Plc’s special purpose vehicle, NBET Finance Company Plc.
AFC said proceeds from the bond issuance will be used to settle verified overdue receivables owed to power generation companies (GenCos) for electricity supplied between February 2015 and March 2025, thereby extinguishing legacy claims and improving liquidity across the sector.
The corporation quoted the Federal Government as saying the initiative is designed to restore financial stability in the power sector, strengthen the balance sheets of GenCos, and enhance investor confidence by clearing arrears that have constrained the industry for more than a decade.
It added that the transaction attracted strong participation from domestic institutional investors, with pension fund administrators accounting for about 50 per cent of the total financing, reflecting increased local capital market support for infrastructure development.
READ ALSO:
- Nigeria Processes Nearly 11bn Digital Transactions in 2024 — CBN
- Nigeria may Lose 6.75 million barrels in February as Shell Begins Maintenance on Bonga Oil Facility
- Access Bank Names Ifeyinwa Osime as Board Chairman
- Oil, Gas Resources Remain Vital to Africa’s Development – NUPRC CEO
AFC said it provided comprehensive financial advisory services to the Federal Government, including the design of the programme’s negotiation strategy framework, support in negotiating and executing settlement agreements with GenCos, and structuring of the bond issuance.
“Working in partnership with CardinalStone Partners as co-Financial Advisers, this transaction reflects AFC’s deep and local market expertise in delivering complex, high-impact policy advice and financial solutions that catalyse sector-wide reforms,” the statement said.
Commenting on the transaction, AFC Executive Board Member and Head, Financial Services, Banji Fehintola, said, “The successful issuance of the inaugural tranche under the Power Sector Bond Programme underscores AFC’s commitment to supporting transformative reforms in Nigeria’s power sector.
“By resolving long-standing liquidity challenges and restoring confidence among investors and operators, this transaction lays the foundation for sustainable growth and improved electricity supply across the country.”
Also commenting, the Special Adviser to the President on Energy, Olu Verheijen, said, “The Programme represents a decisive reset of Nigeria’s electricity market, combining debt resolution with broader financial and structural reforms.
“AFC brought strong sector expertise, deep local market knowledge, and a clear understanding of the market’s commercial complexities, playing a critical role in delivering a credible outcome that supports liquidity restoration, investor confidence and long-term sustainability.”
According to AFC, when fully completed, the programme is expected to affect about 5,398 megawatts of electricity generation capacity, covering settlement for 290,644.84 gigawatt-hours of electricity billed since February 2015.
The initiative is also expected to support new investments in capacity expansion and operational improvements by GenCos serving about 12 million registered electricity customers nationwide.
AFC added that the bond programme forms part of broader power sector reforms, alongside ongoing investments in metering and transmission infrastructure, as well as a gradual transition to bilateral electricity trading based on market-reflective pricing.
Alex is a business journalist cum data enthusiast with the Pinnacle Daily. He can be reached via ealex@thepinnacleng.com, @ehime_alex on X
