The Nigerian government has announced a significant milestone in its efforts to address the country’s power sector debt, with a N501 billion bond issuance under the presidential power sector debt reduction program recording a 1000 percent subscription. The bond, which is part of a broader initiative to resolve legacy debts, restore liquidity, and strengthen confidence in the Nigerian Electricity Supply Industry (NESI), has attracted substantial investment from pension funds, banks, asset managers, and other investors.
According to the Special Adviser to President Bola Tinubu on Energy, Olu Verheijen, the program represents a decisive reset of the electricity market, combining debt resolution with financial and structural reforms. The bond issuance, which comprised N300 billion raised from the capital markets and N201 billion in bonds allotted to participating power generation companies, demonstrates strong investor confidence in the reform agenda.
The program aims to settle verified receivables for electricity supplied between February 2015 and March 2025 through negotiated agreements with power generation companies. To date, five power generation companies, representing fourteen power plants nationwide, have executed Settlement Agreements with the Nigerian Bulk Electricity Trading Plc (NBET), with a total negotiated settlement amount of 827.16 billion to be paid in four phased installments.
The proceeds from the bond issuance will fund the first and second installment payments to participating power generation companies, estimated at N421.42 billion, representing approximately 50 percent of the total negotiated settlement amount. The payment for this initial phase will be made through a mix of cash and notes.
The Federal Government has reaffirmed its commitment to disciplined implementation of the program, aiming to build a financially sustainable electricity market that can support Nigeria’s long-term economic growth. The development comes after generation companies threatened the country’s power industry over N4 trillion in unpaid legacy debt last year. The successful bond issuance and settlement agreements mark a significant step towards resolving the debt crisis and restoring stability to the power sector.
