Nigeria unveils N729bn bond to offset power sector debts, boost electricity reforms

THE Nigerian government has introduced a N729 billion Series 2 Power Sector Bond to settle outstanding obligations owed to electricity generation companies (GenCos), gas suppliers and other industry players as part of efforts to strengthen Nigeria’s power sector.

Minister of Finance and Coordinating Minister of the Economy, Mr Taiwo Oyedele, announced the bond on Tuesday during an investor forum in Abuja. In a statement issued by his Senior Special Assistant on Communications and Press Secretary, Ms Maryann Duke, the minister described the issuance as a key component of the Presidential Power Sector Debt Reduction Programme.

According to Oyedele, the programme is designed to clear verified legacy liabilities, restore confidence among investors and improve the financial health of the Nigerian Electricity Supply Industry (NESI). He said the initiative reflects the government’s commitment to resolving outstanding obligations through transparent, market-based financing that supports liquidity across the electricity value chain and encourages long-term investment.

The minister said the success of the inaugural N501 billion Series 1 Bond demonstrates that the reform programme is yielding results. He noted that the first issuance attracted full subscription and has already met its first scheduled repayment.

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“The first series proved that government keeps its commitments. Investors reward execution, not promises, and every commitment honoured today lowers the cost of capital tomorrow,” he said.

Oyedele explained that proceeds from the second bond would be used to pay verified claims owed to additional GenCos, gas suppliers and service providers. He said the settlement would improve power generation, strengthen market liquidity and enhance operational efficiency across the sector.

He added that dependable electricity remains essential for economic expansion, industrial development, digital innovation and job creation, stressing that sustained national growth is impossible without reliable power infrastructure.

Speaking on the wider economy, the minister said the Tinubu administration has implemented reforms to improve fiscal sustainability, strengthen the investment environment and stabilise the economy. He noted that Nigeria recorded 3.9 percent economic growth in the first quarter (Q1) of 2026 and achieved 11.2 percent growth in US dollar terms in 2025, which he said reflects improving macroeconomic conditions and stronger investor confidence.

Oyedele said government funding alone cannot close Nigeria’s infrastructure financing gap, underscoring the need to attract long-term private capital through credible institutions, sound policies and innovative financing mechanisms.

He urged institutional investors to continue supporting the government’s reform agenda, adding that the bond represents an investment in electricity, economic productivity, industrial competitiveness, employment and shared prosperity. He also reaffirmed the administration’s commitment to reforms that strengthen institutions and make Nigeria a more attractive destination for investment.

Earlier on Tuesday, Special Adviser to the President on Energy, Ms Olu Verheijen, disclosed that the Federal Government had paid N333 billion in legacy debts owed to 8 electricity generation companies.