The Federal Government has raised about ₦1.23 trillion through two series of bond issuances under the Power Sector Debt Reduction Programme, in an effort to settle verified legacy obligations owed to electricity generation companies (GenCos) and strengthen liquidity across Nigeria’s electricity market.
The latest Series II issuance of ₦728.979 billion, completed recently, followed the ₦501.021 billion Series I bond issued in January, bringing the value to approximately ₦1.23 trillion in nine months.
The initiative is part of the Federal Government’s broader ₦4 trillion Power Sector Multi-Instrument Issuance Programme, approved to address verified legacy debt liabilities accumulated across the Nigerian Electricity Supply Industry.
Under the latest transaction, ₦402 billion was raised through cash bonds from the capital market, while ₦326.979 billion was issued as non-cash bonds to participating GenCos. The Series II issuance involved 11 GenCos, compared with eight that participated in the first series.
Speaking at the signing ceremony in Abuja, the Managing Director and Chief Executive Officer of the Nigerian Bulk Electricity Trading Plc (NBET), Akin Odeyemi, said the transaction represented another step towards resolving the financial challenges that have constrained the electricity supply industry.
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The first series involved approximately ₦501 billion, comprising ₦300 billion in cash and about ₦201 billion in non-cash bonds. The Federal Government subsequently disclosed that about ₦333 billion had been paid to eight GenCos covering 17 power plants under the first phase.
The debt-reduction programme is targeted at obligations that have accumulated over several years, weakening the finances of GenCos and gas suppliers and contributing to liquidity constraints across the power value chain.
The government has argued that clearing the verified debts will help restore confidence among market participants, enable GenCos to meet obligations to gas suppliers and lenders, and create room for fresh investment in electricity generation and infrastructure.
Call for Power Sector Reforms
Finance Minister and Coordinating Minister of the Economy, Taiwo Oyedele, however, stressed that debt settlement alone would not resolve the structural challenges facing the electricity market.
The broader reform agenda includes improving revenue assurance, reducing technical and commercial losses, strengthening market discipline and preventing the recurrence of large unpaid obligations.
The ₦1.23 trillion raised so far therefore represents an important financial intervention, but it addresses only part of the wider liabilities identified in the power sector.
Industry analysts have stated that the success of the programme will depend on whether reforms can prevent new arrears from accumulating after the legacy debts are settled.
The Federal Government’s bond programme is consequently being positioned not merely as a mechanism for paying old debts, but as part of a wider effort to restore financial stability to the electricity market and attract sustainable private-sector investment.
Victor Ezeja is a Nigerian journalist skilled in producing insightful news analyses, feature stories, and interviews that simplify complex issues and drive informed public discourse. His work combines rigorous research, balanced reporting, and compelling storytelling to highlight developments shaping industries and society. Victor, who holds a Master's Degree in Mass Communication, specializes in energy, aviation, business, and economic reporting. He can be reached via @VICTOREZEJA on X