Power-sector Legacy Debts: FG Woos Investors Ahead Of N729bn Bonds

The federal government has appealed to financial market participants to increase their investment exposure to Nigeria’s power sector as it prepares to issue a second series of bonds valued at about N729 billion, to settle verified legacy debts owed to electricity generation companies (GenCos).

Recall that the federal government had in January 2026, issued a N501 billion inaugural bond under the Presidential Power Sector Debt Reduction Programme (PPSDRP), to resolve legacy debts, restoring liquidity, and strengthening confidence in the Nigerian Electricity Supply Industry (NESI).

Delivering keynote remarks at the Project HOOVER Series II Investment Forum in Abuja, the Minister of Power, Joseph Tegbe, framed the bond issuance as a pivotal step in transforming longstanding fiscal distortions in the NESI into bankable opportunities.

“Today, I invite you all to deepen your investment position in our power sector — a sector that is being fixed properly, at last,” he said.

Tegbe singled out the Nigerian Bulk Electricity Trading Plc (NBET) and the Debt Management Office (DMO) for their technical stewardship and commitment to the market-based reforms underpinning the programme.

He also lauded the financial advisers and transaction partners whose structuring work, he said, produced an instrument that meets market expectations and advances the government’s reform agenda.

“This forum marks a defining moment in the evolution of Nigeria’s electricity market,” the minister added, stressing that reliable electricity underpinned sustained economic growth and that financially sustainable markets were essential to achieve it.

Olu Verheijen, the Special Adviser to the President on Oil and Gas, echoed that investor confidence follows consistent government action. She said President Bola Ahmed Tinubu’s administration has moved decisively to break from the fiscal dysfunction that for years undermined the power sector. “We are converting yesterday’s liabilities into today’s liquidity and tomorrow’s investment capacity,” she said, adding that sustained liquidity would strengthen the electricity value chain, improve operational performance, and restore market confidence.

Finance Minister and Coordinating Minister of the Economy, Taiwo Oyedele, described the exercise as more than a capital raise: it was about building trust, honouring commitments and addressing legacy challenges structurally. He reminded the audience that the government’s maiden NBET Power Sector Bond — a N501 billion issuance launched just over six months ago — closed fully subscribed and was subsequently listed on the FMDQ Exchange and the Nigerian Exchange Group.

“The first repayment has become history and the framework is tested,” Oyedele said, noting that when coupon and principal payments became due on 14 July, the Federal Government ensured they were met on time — evidence, he said, that the programme’s governance and institutions are robust. He listed the Debt Management Office, the Central Bank of Nigeria, the National Pension Commission, the Nigerian Revenue Service and NBET as institutions backing the initiative.

According to the minister, the power sector’s liquidity gap had persisted for more than a decade due to tariff shortfalls, settlement gaps in the bulk electricity trading framework, accumulated debts to GenCos and suppliers, and grid instability. Those structural problems, he said, could not be resolved through budget reallocations alone but required market-based solutions and coordinated settlement mechanisms. He noted that following a comprehensive review of sector liabilities authorised by President Tinubu in July 2024, a Presidential Power Sector Debt Reduction Committee had been created to verify liabilities and design a sustainable resolution framework, which received Federal Executive Council approval in August 2024.

Representatives of NBET reiterated that the bond issuance is a test of a market proposition: that verified legacy power-sector debt can be addressed transparently through disciplined capital market instruments rather than endless promises.

The acting managing director/CEO of NBET, Johnson Akinnawo, said the N501 billion Series I bond proved the concept, improved liquidity across the electricity value chain and restored investor trust.

Akinnawo, another NBET official involved in the transaction, said Series II — sized at approximately N729 billion — carries the same discipline and rigour as Series I. “Because raising capital is the easier part; stewarding it with integrity is the harder and ongoing work, and we do not take it lightly,” he said.

Market participants at the forum heard that the Series II issuance will be offered ahead of an anticipated listing and aims to settle verified legacy obligations to GenCos, alleviating a major drag on investment decisions and operational performance across the sector. If successful, the government and its transaction partners expect the bond to deepen financial sustainability, attract further private capital, and accelerate the sector’s structural reform path.

The forum’s tone combined reassurance to investors with an explicit appeal: that Nigeria’s power sector now presents bankable paper backed by credible institutions and tested repayment performance. As the administration presses ahead with its reform programme, the N729 billion NBET bond will be viewed as an important barometer of market confidence in the country’s ability to convert liabilities into long-term investment.