The Federal Government has deepened efforts to resolve Nigeria’s persistent power sector liquidity crisis with the signing of a N728.979 billion Series-2 bond aimed at settling verified legacy debts owed to electricity generation companies.
The transaction, executed under the Federal Government’s N4 trillion Power Sector Debt Reduction Programme, is expected to provide fresh financial relief to participating generation companies (GenCos) while strengthening confidence in the electricity market.
The Series-2 transaction consists of N402 billion in cash bonds raised through the domestic capital market and N326.979 billion in non-cash bonds allocated to participating GenCos.
The latest issuance represents an expansion of the debt-settlement initiative, with 11 generation companies participating in Series-2, compared with eight companies that took part in the first series.
Speaking at the signing ceremony in Abuja, the Managing Director and Chief Executive Officer of Nigerian Bulk Electricity Trading Plc (NBET), Mr. Akinola Odeyemi, described the transaction as a major development in the government’s efforts to tackle the financial challenges that have continued to undermine the Nigerian Electricity Supply Industry.
“Today’s event represents another important milestone in the Federal Government’s efforts to address the longstanding financial challenges confronting the Nigerian electricity supply industry and to strengthen the foundation for a more sustainable and reliable power sector,” he said.
Odeyemi explained that the debt-reduction programme was not limited to clearing historical financial obligations, but was also intended to restore liquidity and confidence across the electricity value chain.
He said the initiative would help create a more stable financial environment capable of supporting fresh investment in power generation, while reducing some of the financial pressures that have constrained operators in the sector.
The NBET chief noted that the increased number of participating GenCos in the second phase was significant, describing the development as evidence of growing stakeholder confidence in the government’s approach to resolving verified outstanding obligations.
The Series-2 issuance, which was launched in August 2026, comes against the backdrop of years of accumulated debts within the electricity market. The burden of unpaid obligations has affected the ability of generation companies and other market participants to maintain operations, invest in new capacity and meet financial commitments.
For the Federal Government, the bond programme represents an attempt to use a structured financial mechanism to address the legacy component of the crisis while broader reforms are pursued across the electricity sector.
The Minister of Finance and Coordinating Minister of the Economy, Mr. Taiwo Oyedele, said the Series-2 transaction was another important step towards resolving accumulated legacy obligations that had weakened liquidity and restricted investment in Nigeria’s electricity market.
Oyedele, however, cautioned that debt settlement alone would not be sufficient to guarantee a sustainable turnaround in the sector.
He said the success of the bond programme would depend on complementary reforms aimed at improving market policy, strengthening revenue assurance, reducing technical and commercial losses and promoting greater efficiency and accountability across the electricity ecosystem.
The minister also highlighted the importance of the domestic capital market to the Federal Government’s broader economic strategy, saying the transaction demonstrated that Nigeria could mobilise long-term domestic capital to address major economic challenges.
He warned that the effectiveness of the intervention should not be judged simply by the amount of bonds issued, stressing the need for the financial intervention to translate into tangible improvements in the electricity market.
According to him, the ultimate objective must be to create a power sector that can operate on a more financially sustainable footing rather than repeatedly relying on government intervention to settle accumulated obligations.
Also speaking at the event, the Senior Special Adviser to the President on Energy, Olu Verheijen, who was represented by Iriye Onaguruwa, described the Series-2 transaction as a major expansion of the Presidential Power Sector Financial Reform Programme.
The expansion from eight participating generation companies in Series-1 to 11 in Series-2 underscores the broader scope of the intervention and the government’s continuing efforts to address financial constraints within the power market.
The latest bond issuance is therefore expected to serve a dual purpose: providing relief to GenCos with verified outstanding claims while supporting wider reforms designed to restore financial stability and improve confidence in Nigeria’s electricity supply industry.
However, the sustainability of the intervention will ultimately depend on whether the sector can improve its revenue collection, reduce losses, strengthen accountability and establish a market structure capable of meeting its financial obligations without the repeated accumulation of legacy debts.
With the Series-2 transaction now signed, attention is expected to shift towards implementation and the extent to which the intervention will improve liquidity, support investment in generation and contribute to more reliable electricity supply for consumers and businesses across the country.