The Federal Government has successfully raised ₦728.979 billion through a second bond issuance to settle verified legacy debts owed to electricity generation companies (GenCos), in a move aimed at restoring liquidity and rebuilding confidence in Nigeria’s troubled power sector.
The transaction forms part of the ₦4 trillion Power Sector Multi-Instrument Issuance Programme, approved by the Federal Executive Council to address long-standing financial obligations owed to power generation companies and gas suppliers.
With the latest issuance, the government has now raised approximately ₦1.23 trillion under the programme’s first phase, following the successful ₦501.021 billion Series 1 bond completed in January 2026.
The Series 2 issuance comprises ₦402 billion in cash bonds raised from the domestic capital market and ₦326.979 billion in non-cash bonds allocated directly to participating GenCos under the Presidential Power Sector Debt Reduction Programme.
The Federal Government said the structure was designed to resolve verified outstanding obligations in a transparent and market-driven manner while reducing the financial strain on electricity producers.
Speaking during the signing ceremony in Abuja, the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, described the transaction as a major step toward fixing the liquidity crisis that has weakened Nigeria’s electricity value chain.
According to him, years of accumulated unpaid invoices have constrained investment, reduced confidence among market participants and limited the ability of power companies to expand generation capacity.
Nigeria’s electricity market has struggled with persistent liquidity challenges for more than a decade.
Electricity generation companies produce power, but delayed payments from the market have resulted in mounting debts running into trillions of naira. The cash flow crisis has affected payments to gas suppliers, lenders and operations and maintenance contractors, limiting investment across the sector.
Under the debt reduction programme, only verified legacy obligations are eligible for settlement, with the government insisting that the initiative is intended to restore financial discipline rather than create another cycle of unpaid debts.
The Nigerian Bulk Electricity Trading Plc (NBET), which is sponsoring the programme, said the second issuance attracted broader participation than the inaugural bond.
According to NBET, 11 generation companies participated in Series 2, compared with eight GenCos under the first issuance, reflecting growing confidence in the programme’s credibility.
The first bond also recorded 100 per cent subscription, demonstrating strong demand from pension fund administrators, banks, sovereign wealth funds, asset managers and other institutional investors.
Government officials stressed that settling historical debts alone will not solve the electricity sector’s structural problems.
Oyedele said the bond programme must be accompanied by reforms aimed at improving revenue collection, reducing technical and commercial losses, strengthening market discipline and ensuring greater accountability across the electricity ecosystem.
Special Adviser to the President on Energy, Olu Verheijen, added that while the first bond proved the viability of the debt reduction model, the second issuance expands its impact by injecting additional liquidity into the market and supporting long-term investment.
Industry stakeholders believe the repayment of verified debts will improve the financial position of GenCos, enabling them to meet obligations to gas suppliers and invest in maintaining and expanding electricity generation capacity.
AbdulBasit Saba is a journalist and contributor to Freelanews.com, covering news, business, and public affairs.
