The Federal Government’s N501.02 billion bond issuance has been hailed as a major breakthrough in Nigeria’s efforts to reform its power sector, specifically targeting persistent liquidity challenges that have long hampered the industry.
In a statement released on Monday, the Ministry of Power described the bond as central to rebuilding confidence in the electricity market and positioning the sector for long-term viability. The issuance, carried out through the Nigerian Bulk Electricity Trading (NBET) Plc, is a key component of the broader N4 trillion Presidential Power Sector Debt Reduction Programme approved by President Bola Tinubu.
“This marks a strategic shift from temporary, ad hoc interventions to structured, market-driven solutions,” the ministry said. “It is designed to clear a significant portion of the over N6 trillion debt burden crippling the sector. The initiative reflects a reform-focused approach aimed at tackling deep-rooted structural inefficiencies.”
The statement noted that chronic revenue shortfalls—stemming from non-cost-reflective tariffs and underfunded subsidies—have constrained generation companies (GENCOs) from meeting their obligations to gas suppliers and maintaining critical infrastructure. The bond proceeds are expected to reverse this trend by settling legacy debts, restoring gas supply, and enabling better plant maintenance, all of which are vital to boosting electricity generation.
Beyond immediate liquidity relief, the intervention signals renewed investor confidence, backed by a sovereign guarantee and aligned with global financing standards.
According to the ministry, the bond is positioned to attract private capital, enhance the bankability of power sector projects, and stimulate further investments in generation and transmission infrastructure.
The bond also complements other ongoing reforms, including targeted subsidies for vulnerable consumers and gradual tariff adjustments, reflecting a broader policy shift toward full commercialisation and long-term sustainability.
“This is not just about settling debts—it’s about resetting the foundation of the electricity market,” the ministry added. “By restoring liquidity, enhancing bankability, and creating a more predictable investment climate, the government is laying the groundwork for sustainable growth and improved electricity supply across the country.”