Nigeria Launches Landmark N590 Billion Power Sector Bond to Clear Arrears and Revitalize Generation
Nigeria has taken a significant step towards addressing its persistent power sector challenges with the successful issuance of a N590 billion Series 1 Power Sector Bond. This landmark financial instrument, orchestrated by Nigerian Bulk Electricity Trading (NBET) Plc through its Special Purpose Vehicle, NBET Finance Company Plc, marks the inaugural phase of the ambitious Presidential Power Sector Debt Reduction Programme. The programme aims to collectively raise N1.23 trillion by the first quarter of 2026, with the primary objective of settling verified outstanding arrears owed to generation companies and vital gas suppliers.
This initiative is positioned not as a bailout, but as a “strategic reset” designed to clear accumulated debts, restore much-needed liquidity to the sector, and empower generation companies with the financial stability required to operate and invest with renewed confidence. Mrs. Olubukola Verheijen, Special Adviser to the President on Energy, articulated this vision during a virtual forum for prospective investors, emphasizing the programme’s potential to create the necessary breathing room for operators. This stability, she explained, will enable them to stabilize operations and forge ahead with new investments crucial for delivering reliable electricity to the Nigerian populace.
The Presidential Power Sector Debt Reduction Programme, authorized by government-backed bonds, is set to address a substantial debt overhang that has long stifled new investments, weakened the balance sheets of utility companies, and consequently undermined the reliability of electricity supply across the nation. This comprehensive programme is envisioned as the largest coordinated financial intervention in the history of Nigeria’s power sector.
The groundwork for this significant undertaking was laid with the approval of the Presidential Power Sector Debt Reduction Programme by President Bola Tinubu and its subsequent endorsement by the Federal Executive Council (FEC) in August 2025. This approval authorized the issuance of up to N4 trillion in government-backed bonds.
A pivotal moment in the programme’s development was the inaugural Investor Forum held in December 2025. This event attracted an impressive turnout of over 600 participants, underscoring the significant investor interest in the Nigerian power sector. Attendees included a diverse range of stakeholders, such as representatives from major banks, pension funds, insurance companies, issuing houses, asset managers, family offices, and trustees, all gathered to gain insight into the bond issuance programme.
The successful issuance of the N590 billion Series 1 Power Sector Bond, preceding the end of 2025, signifies a crucial milestone within the broader N4 trillion Multi-Instrument Issuance Programme. This initial issuance is just the beginning, with the bond issuance programme slated to continue its trajectory into 2026, aiming to achieve its ambitious funding targets.
Key Objectives and Expected Outcomes:
The Presidential Power Sector Debt Reduction Programme is designed with several critical objectives in mind:
- Debt Resolution: To systematically clear verified arrears owed to generation companies and gas suppliers.
- Liquidity Restoration: To inject much-needed capital back into the sector, improving the financial health of key players.
- Investment Enablement: To provide a stable financial environment that encourages new investments in power generation and infrastructure.
- Operational Stability: To allow operators to focus on improving operational efficiency and reliability.
- Enhanced Power Supply: Ultimately, to contribute to a more consistent and reliable electricity supply for Nigerian citizens and businesses.
The Role of Financial Advisors:
CardinalStone Partners Limited has been appointed as the Lead Financial Adviser and Lead Issuing House for this monumental transaction, playing a crucial role in structuring and executing the bond issuance. Their expertise is vital in navigating the complexities of the capital markets and ensuring the successful placement of the bonds with a wide array of institutional investors.
The Scale of the Programme:
The N4 trillion authorized under the Presidential Power Sector Debt Reduction Programme highlights the government’s commitment to tackling the deep-seated issues within the power sector. This multi-instrument issuance programme is structured to provide a sustainable financial framework for the sector’s long-term growth and stability.
The successful launch of the Series 1 bond is a testament to the strategic planning and collaborative efforts between government entities and private sector players. As the programme unfolds, its impact on Nigeria’s power sector and broader economic development is anticipated to be substantial.
