FG Pledges to Reform Electricity Market with Fresh N500bn Bond Capital Raise

The Federal Government of Nigeria has pledged to reform the country’s electricity sector after it on Tuesday successfully issued N501 billion inaugural bond under the Presidential Power Sector Debt Reduction Programme (PPSDRP).

The capital raise recorded 100% subscription from pension funds, banks, asset managers and other investors, marking a significant step towards resolving legacy debts, restoring liquidity, and strengthening confidence in the Nigerian Electricity Supply Industry (NESI).

The Programme, championed by President Bola Tinubu, is designed to address long-standing payment arrears owed to power generation companies, which for over a decade constrained liquidity, weakened balance sheets and discouraged investment across the power sector value chain.

Speaking at the bond issuance signing ceremony in Lagos on 27 January 2026, the Special Adviser to the President on Energy

Olu Arowolo Verheijen

, stated that the Programme represents a decisive reset of the electricity market, combining debt resolution with broader financial and structural reforms.

The Capital Raise

The signing follows the successful completion of Series 1 Power Sector Bond Issuance by NBET Finance Company Plc. Series 1 issuance closed at N501 billion, comprising N300 billion raised from the capital markets and N201 billion in bonds 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 power generation companies.

To date, five power generation companies (Gencos) representing 14 power plants nationwide have executed Settlement Agreements with the Nigerian Bulk Electricity Trading Plc (NBET). The total negotiated settlement amount for these companies stands at N827.16 billion, to be paid in four phased instalments.

The five Gencos are First Independent Power Limited (FIPL), Geregu Power Plc, Ibom Power Company Limited, Mabon Limited and Niger Delta Power Holding Company Limited (NDPHC).

Presidency on Tuesday said the proceeds from Series 1 issuance will fund the first and second instalment payments to participating power generation companies with signed Settlement Agreements, estimated at N421.42 billion, representing approximately 50% of the total negotiated settlement amount. The payment for this initial phase will be made through a mix of cash and notes.

Remarks

Mr. Kola Adesina, Group Managing Director of Sahara Power Group, which owns five power plants, said, “Capital formation can only come when there is confidence, when you can truly see a line of sight in recovering investments previously made.

“Because we were being owed so much, it was a bit of a problem for us to put in more money. But last year we took the bull by the horns, based on President Bola Ahmed Tinubu’s commitment in resolving the legacy issues, and I can say that once this process is over, construction will commence immediately on the second phase of our Egbin Power Plant. On behalf of the Generation Companies, I’d like to thank the President for this resolution.”

Impact

By clearing historic arrears, the Programme is expected to improve liquidity for power generation companies, strengthen their ability to meet operating and debt obligations, unlock new investment across the sector and support more reliable electricity supply to homes and businesses.

It also reinforces fiscal discipline through validated claims, negotiated settlements and transparent capital market financing.

When completed, Presidency assured that the programme will impact 4,483.60MWh/h of electricity generation capacity by Nigerian GenCos, effectively finalising settlement of payments for 290,644.84GWhr of electricity billed since February 2015 and providing a strong foundation for new investments into capacity enhancement and expansion by companies serving 12.03mn active registered customers across the country.

Parties’ acknowledgment

The Special Adviser to the President on Energy, Verheijen, recognises the visionary leadership of President Bola Ahmed Tinubu, as well as the support from the Honourable Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, and the Honourable Minister of Power, Chief Adebayo Adelabu, in making the PPSDRP a reality.

She further acknowledges the support of all members of the Presidential Power Sector Debt Reduction Committee who played vital roles in making this capital raise a success, all key power sector stakeholders as well as government authorities, including the Debt Management Office, Central Bank of Nigeria, the National Pensions Commission, and the Nigerian Revenue Service, who facilitated enhancements for the Bond Issue.

CardinalStone Partners Limited, a leading Investment banking firm in Nigeria, led the consortium of appointed professional parties as Lead Financial Adviser and Lead Issuing House to successfully execute the Series 1 Bond Issue, working closely with the Nigerian Bulk Electricity Trading Plc (NBET) that acted as Sponsor on the Transaction, and the Office of the Special Adviser on Energy that led the settlement negotiations and engagements with the Generation Companies.

Verheijen, said, “The Federal Government reaffirms its commitment to disciplined implementation of the Programme, and we look forward to the participation of other power generation companies, as part of our broader reforms aimed at building a financially sustainable electricity market that is capable of supporting Nigeria’s long-term economic growth.”