Nigeria’s power sector reform recorded a major milestone on Monday as the Federal Government successfully issued a ₦501 billion inaugural bond under the Presidential Power Sector Debt Reduction Programme (PPSDRP), with the offer recording 100 per cent subscription from institutional investors.
The bond issuance, which attracted strong participation from pension funds, banks and asset managers, is aimed at resolving long-standing payment arrears owed to power generation companies and restoring liquidity across the Nigerian Electricity Supply Industry (NESI).
The PPSDRP, championed by Bola Ahmed Tinubu, is designed to clear verified legacy debts that have weighed on the power sector for more than a decade, weakening balance sheets and discouraging fresh investment.
Speaking at the signing ceremony in Lagos on January 27, 2026, the Special Adviser to the President on Energy, Olu Verheijen, said the programme represents a decisive reset of the electricity market, combining debt resolution with broader financial and structural reforms.
The Series 1 Power Sector Bond Issuance was executed by NBET Finance Company Plc, closing at ₦501 billion. Of this amount, ₦300 billion was raised from the capital market, while ₦201 billion in bonds was allotted to participating power generation companies, reflecting strong investor confidence in the reform agenda.
Under the programme, verified receivables for electricity supplied between February 2015 and March 2025 are being settled through negotiated agreements with generation companies. Five GenCos—First Independent Power Limited, Geregu Power Plc, Ibom Power Company Limited, Mabon Limited and Niger Delta Power Holding Company Limited—have executed settlement agreements with Nigerian Bulk Electricity Trading Plc. The total negotiated settlement for these companies stands at ₦827.16 billion, to be paid in four phased instalments.
Proceeds from the Series 1 issuance will fund the first two instalments, estimated at ₦421.42 billion, representing about half of the negotiated settlement amount. Payments will be made through a combination of cash and notes.
Industry stakeholders say the clearance of historic arrears is expected to improve liquidity for power producers, strengthen their ability to meet operating and debt obligations, and unlock new investment across the sector. The programme is projected to impact 4,483.60 MWh/h of generation capacity and finalise settlement for over 290,644 GWh of electricity billed since 2015, benefiting more than 12 million registered electricity customers nationwide.
The Federal Government acknowledged the support of key institutions, including the Ministry of Finance, Ministry of Power, the Debt Management Office, the Central Bank of Nigeria and the National Pensions Commission, in ensuring the success of the bond issuance. CardinalStone Partners Limited served as Lead Financial Adviser and Issuing House for the transaction, working alongside NBET and the Office of the Special Adviser on Energy.
Verheijen said the government remains committed to disciplined implementation of the programme and expects additional generation companies to participate as reforms continue to strengthen the financial sustainability of Nigeria’s electricity market.
