The Federal Government of Nigeria has finalized plans to issue a N1.23 trillion Power Sector Bond to tackle debts owed to power generation companies and stabilize the electricity market. Finance Minister Wale Edun announced this during an investor forum, highlighting its role in a broader N4 trillion debt resolution program. The initiative aims to restore liquidity and investor confidence in the Nigerian Electricity Supply Industry.
Finance Minister and Coordinating Minister of the Economy, Wale Edun, revealed that the government has arranged for the issuance of a N1.23 trillion Power Sector Bond. This measure targets the debt obligations to power generation companies, known as GENCOs, and seeks to steady the electricity market. Edun shared these details at an Investor Forum organized by the Presidential Power Sector Debt Reduction Committee, in partnership with transaction advisers.
The bond is part of a larger N4 trillion debt program intended to inject liquidity into the Nigerian Electricity Supply Industry and enhance investor trust. Edun pointed out that, as of June 2025, the government owed GENCOs around N6 trillion due to unpaid electricity subsidies. In talks with GENCO representatives, there was agreement that roughly 50 percent of this debt could be waived to lighten the load.
The event, hosted by the Nigerian Bulk Electricity Trading and CardinalStone Partners Limited, attracted more than 650 attendees, including pension fund managers, bankers, asset managers, insurers, and high-net-worth individuals. Many showed keen interest in purchasing the bond. Edun stressed that the bond adheres to global standards, drawing in long-term institutional investors and gaining liquidity recognition from the Central Bank of Nigeria. It also benefits from exemptions by the National Pension Commission, making it suitable for pension fund investments.
Edun noted that this approach boosts market openness, fosters rivalry, and supports private sector involvement, which drives about 90 percent of Nigeria's economy. He favored such market-driven funding over alternatives like money printing. President's Special Adviser on Energy, Olu Verheijen, underscored the need for financial and structural changes alongside debt settlement to avoid future issues. Acting Managing Director of NBET, Johnson Akinnawo, called the program a 'strategic reset' for the sector, backed by the government's sovereign guarantee, and poised to fuel industrial and household growth.
The initial phase of the bond issuance will deliver immediate cash flow to GENCOs, settle historical debts, and lay groundwork for a more effective, independent electricity market.
