The Federal Government has launched the first phase of the Presidential Power Sector Debt Reduction Programme with the issuance of ₦1.23 trillion in Federal Government-guaranteed bonds, marking a major milestone in ongoing efforts to reform and stabilise Nigeria’s electricity market.
The initial bond issuance, expected to be completed by the first quarter of 2026, will be used to clear verified arrears owed to power generation companies (GenCos) and gas suppliers—debts that have long constrained liquidity, discouraged investment, and weakened the sector’s operational efficiency. Several GenCos have already signed final settlement agreements with the government, while negotiations continue with others.
The launch took place during a well-attended virtual investor forum jointly hosted by the Ministry of Finance, Ministry of Power, and the Office of the Special Adviser to the President on Energy. More than 600 institutional investors participated, including pension funds, banks, insurance firms, asset managers, family offices, issuing houses, and trustees. Speakers included the Minister of Finance, Mr. Wale Edun; the Minister of Power, Chief Adebayo Adelabu; and the Special Adviser to the President on Power, Olu Arowolo Verheijen.
Special Adviser on Energy, Olu Verheijen, outlined the extensive verification and negotiations that paved the way for the launch. She confirmed that agreements covering 100% of the Phase 1 issuance have been concluded, with remaining GenCos nearing completion. She stressed that the initiative represents a “strategic reset” rather than a bailout, aimed at restoring liquidity and strengthening GenCos’ capacity to operate and invest confidently.
Verheijen also emphasized that clearing legacy debts must be complemented by ongoing reforms to ensure long-term stability, including cost-reflective tariffs, improved service delivery, metering expansion, and stronger commercial discipline.
Finance Minister Wale Edun praised investors for their confidence in the Tinubu administration’s economic reforms, describing the initiative as “bold and transformative,” and reaffirming government’s commitment to transparency and disciplined financial management.
Power Minister Adebayo Adelabu highlighted improvements in electricity market revenues, noting that distribution companies’ collections increased from ₦1 trillion in 2023 to an estimated ₦2.2 trillion in 2025, driven by tariff reforms and enforcement of commercial standards.
The bonds are being issued by NBET Finance Company Plc, with CardinalStone Partners Limited serving as Lead Financial Adviser and Lead Issuing House. The Africa Finance Corporation (AFC) is Joint Financial Adviser, while Afrinvest West Africa Limited acts as Bond Trustee.
About Presidential Power Sector Debt Reduction Programme
The Presidential Power Sector Debt Reduction Programme (PPSDRP), approved by President Bola Ahmed Tinubu and endorsed by the Federal Executive Council in August 2025, authorizes the Federal Government to issue up to ₦4 trillion in government-backed bonds. It is regarded as the largest coordinated financial intervention in Nigeria’s power sector.
The programme is a structured debt-clearing mechanism designed to settle verified outstanding payments owed to power Generation Companies (GenCos) and Gas Suppliers (GasCos) by the Nigerian Bulk Electricity Trading Company (NBET). By clearing these arrears, the programme aims to restore liquidity and stability across the electricity market.
NBET, a government-owned bulk trader, purchases electricity from GenCos and sells it to Distribution Companies (DisCos), who then supply power to end-users.
