The Federal Government has launched a N729 billion bond under the second series of its Presidential Power Sector Debt Reduction Programme. This initiative aims to settle verified legacy debts owed to electricity generation companies (GenCos) and facilitate payments to gas suppliers and other service providers.
The bond was launched by the Nigerian Bulk Electricity Trading (NBET) Plc in Abuja on July 21, 2026, at an investors’ forum organised in conjunction with CardinalStone.
This second bond issuance follows the government’s deployment of approximately N501 billion under the first series in February 2026. That initial phase comprised N300 billion in cash and N201 billion in non-cash bond instruments, settling part of the verified debts owed to GenCos.
The programme is designed to address the liquidity crisis in Nigeria’s electricity market, restore the commercial viability of the sector, and improve investor confidence across the electricity value chain.
Special Adviser to the President on Oil and Gas, Olu Verheijen, stated that the first series demonstrated the Federal Government’s commitment to honouring its obligations, helping to restore confidence among investors and market participants. “Markets do not reward promises; they reward performance. Capital follows credibility,” Verheijen said.
Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, added, “Investors do not reward intentions; they reward execution. Every commitment honoured today reduces the cost of capital tomorrow.” Power Minister Joseph Tegbe emphasized that the debt reduction programme is a key economic reform aimed at restoring the commercial viability of Nigeria’s electricity market, with a clear destination of “a financially sustainable, investment-led electricity market that powers Nigeria’s industrial renaissance.”
Verheijen further noted that the second series would deepen market liquidity and strengthen the financial foundation required to attract long-term private investment in the power sector. Onyebuchim Obiyemi, Head of Investment Banking at CardinalStone, detailed investor participation in the first series, where pension fund administrators (PFAs) accounted for about N150 billion of the N300 billion raised in cash under Tranche A.
Commercial banks contributed about 41.5% of the first issuance, while asset managers secured approximately N17 billion, representing 5.8% of the offer size. Obiyemi indicated that organisers are seeking to broaden the investor base for the second series to include asset managers, insurance companies, family offices, and other institutional investors. The first series was priced at 17.5% for the seven-year instrument.
The Federal Executive Council had approved a N4 trillion Power Sector Debt Reduction Initiative after a comprehensive verification of outstanding liabilities. This exercise reduced outstanding claims from more than N4 trillion to about N3.3 trillion through line-by-line validation of services rendered.
Under the first series, N333 billion has been paid to eight participating GenCos covering 17 power plants. The first coupon payment of about N63.5 billion on the seven-year bond was made in full on July 14, 2026. This timely settlement enabled participating generation companies to meet obligations to gas suppliers, lenders, and operations and maintenance contractors.
The government stated that the second bond issuance would complete the first phase of the debt settlement programme and extend payments to more participants across the electricity value chain. The bond programme is positioned as part of broader reforms aimed at strengthening public finances, improving infrastructure financing, and mobilising long-term private capital for strategic sectors.
Acting Managing Director and Chief Executive Officer of NBET Plc, Johnson Akinnawo, highlighted that the success of Series I demonstrated that Nigerian power sector debt instruments could attract investor confidence. He affirmed that “Nigerian power sector paper has proven that it is bankable.”
