By Obas Esiedesa, Abuja
The Federal Government has finalised plans to launch a N1.23 trillion Power Sector Bond as part of a broader N4 trillion debt programme designed to restore liquidity, stabilise the electricity market and rebuild investor confidence.
The Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, disclosed at an Investor Forum organised by the Presidential Power Sector Debt Reduction Committee (PPSDRC) in collaboration with transaction advisers, ahead of the Phase 1 issuance of the Bond, which is backed by a sovereign guarantee of the Federal Government.
The forum, hosted by NBET and CardinalStone Partners Limited, attracted over 650 participants, including pension fund administrators, asset managers, banks, insurance companies, trustees and high-net-worth individuals, many of whom expressed strong interest in participating in the offer.
The government as of June 2025 owed power generation companies about N6 trillion in unpaid electricity subsidy. To reduce the liability, the officials have mounted pressure on the companies to forfeit about 50 percent of the debt.
According to the Minister, the Bond has been carefully structured to meet global best practices and to attract long-term institutional investors, particularly pension funds.
He confirmed that the instrument qualifies for Central Bank of Nigeria (CBN) liquidity status and has also secured exemption from the National Pension Commission (PenCom), making it eligible for investment by Pension Fund Administrators.
“This is a way of strengthening market transparency, encouraging competition and encouraging the private sector, which accounts for about 90 per cent of the economy,” Edun said.
He stressed that the Federal Government remains committed to transparency, fiscal responsibility and disciplined financial management, noting that the administration prefers market-based financing solutions rather than resorting to money printing or unsustainable funding options.
“The Government’s commitment is to transparency, fiscal responsibility and disciplined financial management—coming to the market rather than printing money or exploring other ways of raising necessary funds,” he added.
The Finance Minister explained that the Power Sector Bond Programme is a first-of-its-kind initiative aimed at resolving legacy debts in the Nigerian Electricity Supply Industry (NESI), while laying the foundation for a more efficient and self-sustaining power market.
Earlier in her remarks, the Special Adviser to the President on Energy, Mrs. Olu Verheijen, said the Bond programme was a critical first step in a broader power sector reform agenda, stressing that debt clearance must be accompanied by financial and structural reforms to prevent the build-up of new liabilities.
In his remarks, the Acting Managing Director of Nigerian Bulk Electricity Trading Plc (NBET), Mr. Johnson Akinnawo, described the programme as a “strategic reset” for the power sector rather than a bailout.
“This is not a bailout. It is a strategic reset,” Akinnawo said.
“The sovereign guarantee of the Federal Government is the unwavering sunlight and water that ensures this planting will grow into a forest of opportunities, powering industries, homes and dreams.”
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