The Federal Government has raised ₦728.979 billion through the second issuance under its ₦4 trillion Power Sector Multi-Instrument Issuance Programme, bringing the value of bonds issued under the first phase of the initiative to approximately ₦1.23 trillion.
The latest issuance is aimed at settling verified outstanding debts owed to electricity generation companies (GenCos), whose unpaid claims have weakened liquidity and constrained investment across the power sector.
The Series 2 bond follows the successful completion of the inaugural ₦501.021 billion Series 1 issuance in January 2026.
The first issuance recorded 100 per cent subscription, with ₦300 billion raised from the capital market and ₦201.021 billion issued as non-cash bonds to participating GenCos.
The latest transaction comprises ₦402 billion in cash bonds raised from the capital market and ₦326.979 billion in non-cash bonds allotted to participating GenCos under the Presidential Power Sector Debt Reduction Programme.
Speaking at the signing ceremony in Abuja on Monday, the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, said the transaction was designed to address legacy obligations that have weakened Nigeria’s electricity market.
“This transaction addresses an important challenge in Nigeria’s electricity markets, which is accumulated legacy obligations that have weakened liquidity, constrained investments, and affected confidence across the value chain,” Oyedele said.
“The federal government’s objective is to resolve legitimate legacy obligations in a structured and transparent manner, while implementing the reforms necessary to prevent their recurrence.”
Oyedele stressed that the bond programme must be supported by reforms to prevent the accumulation of fresh debts, saying the government’s broader objective was to build a financially sustainable electricity market.
“This means the bond programme cannot stand alone. It must be accompanied by stronger market discipline, improved revenue assurance, reduction in technical and commercial losses, greater efficiency and accountability across the electricity ecosystem,” he said.
He added that the government was leveraging Nigeria’s domestic capital markets to address significant economic challenges while deepening the financial system and mobilising long-term domestic capital.
The minister said the success of the programme would not be measured by the amount raised, but by its impact on electricity supply and the ability of market participants to meet their obligations.
“Ultimately, the success of this programme will not be measured by the amount or size of bond that we have issued.
“It will be measured by whether we achieve a financially sustainable electricity market that can attract investments, meet its obligations and deliver more reliable power to Nigerian households and businesses,” Oyedele said.
The Chief Executive Officer of the Nigerian Bulk Electricity Trading Plc (NBET), Akinola Odeyemi, said the Series 2 bond had an aggregate value of ₦728.979 billion and would be implemented in two tranches, Tranche A and Tranche B.
He disclosed that 11 GenCos were participating in the second phase, compared with eight under Series 1.
According to Odeyemi, the increased participation reflects growing confidence in the programme and its ability to provide a credible framework for addressing verified outstanding obligations in the electricity sector.
“The increased participation is a positive development and reflects the growing confidence of stakeholders in the programme and its ability to provide a credible framework for addressing verified outstanding obligations to the sector,” he said.
Odeyemi said the accumulation of unpaid obligations had affected the ability of market participants to meet their commitments and constrained GenCos’ capacity to invest in increasing electricity generation.
“It is therefore important that the Debt Reduction Programme is viewed not simply as an initiative for settling historical debt, but also as part of a broader effort to restore financial confidence, liquidity and sustainability to the Nigerian electricity supply industry,” he said.
The Special Adviser to the President on Energy, Olu Verheijen, said the first issuance had demonstrated the viability of the debt-reduction model, while the second was intended to expand its impact.
Verheijen said the first series resulted in settlement agreements with 11 GenCos representing 21 power plants.
“Now we are moving deeper into implementation with Series 2. As I said at the investor forum in July, Series 1 proved the model and Series 2 is scaling it. As important as it is, you would agree that scaling is what truly makes the difference,” she said.
She said the two issuances had delivered more than ₦1.1 trillion under the ₦4 trillion ceiling approved by the Federal Government.
Giving an overview of the programme, Michael Nwezi of CardinalStone, the lead issuing house and financial adviser to the transaction, said the programme demonstrated what could be achieved when public-sector leadership and private-sector capital align behind a shared national objective.
“This is by far the largest fund issuance in the history of the Nigerian capital market. Across the two series, the transaction attracted participation across a broad investor base, including pension fund administrators, banks, sovereign wealth funds, asset managers, and other institutional and retail investors,” he said.
The ₦4 trillion Power Sector Multi-Instrument Issuance Programme was approved by the Federal Executive Council in August 2025 to address verified legacy obligations owed to power generation companies and gas suppliers.
The programme is designed to improve liquidity, strengthen investor confidence and support sustainable electricity generation by resolving unpaid claims accumulated over several years.
The first phase comprises the ₦501.021 billion Series 1 bond and the ₦728.979 billion Series 2 bond, bringing the combined issuance value to approximately ₦1.23 trillion.
The Federal Government has said the broader objective is to settle legitimate legacy debts while implementing reforms to improve revenue assurance, reduce technical and commercial losses, and prevent the recurrence of unpaid obligations across the electricity value chain.
