The Federal Government has raised N728.979bn through the second issuance under its N4tn Power Sector Multi-Instrument Issuance Programme, thereby bringing the cumulative value of bonds issued under the first phase of the initiative to approximately N1.23tn.
The Series 2 bond, which was issued following the successful completion of the inaugural N501.021bn Series 1 issuance in January this year, is aimed at settling verified outstanding debts owed to electricity generation companies (GenCos).
According to data on the performance of the programme, the first bond issuance raked in N300bn from the capital market and N201.021bn issued as non-cash bonds to participating GenCos.
The latest transaction comprises N402bn in cash bonds raised from the capital market and N326.979bn in non-cash bonds allotted to participating GenCos under the Presidential Power Sector Debt Reduction Programme.
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Delivering his keynote address at the bond issuance signing ceremony on Monday in Abuja, the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, said the transaction was designed to address the legacy obligations that had weakened the electricity market.
The minister explained: “This transaction addresses an important challenge in Nigeria’s electricity markets, which is accumulated legacy obligations that have weakened liquidity, constrained investments, and affected confidence across the value chain.
“The Federal Government’s objective is to resolve legitimate legacy obligations in a structured and transparent manner, while implementing the reforms necessary to prevent their recurrence.
“This means the bond program cannot stand alone. It must be accompanied by stronger market discipline, improved revenue assurance, reduction in technical and commercial losses, greater efficiency and accountability across the electricity ecosystem.
“It is also important that we are leveraging Nigeria’s domestic capital markets. This demonstrates how the government can use appropriate market instruments to address significant economic challenges, while deepening our financial markets and mobilising long-term domestic capital”, Oyedele added.
The minister maintained that the success of the programme would not be measured by the amount of money raised, but that “it will be measured by whether we achieve a financially sustainable electricity market that can attract investments, meet its obligations and deliver more reliable power to Nigerian households and businesses.”
Speaking at the event, the Chief Executive Officer of the Nigerian Bulk Electricity Trading Plc (NBET), Akinola Odeyemi, said the Series 2 bond, which has 11 generation companies as participants compared with eight GenCos under Series 1, had an aggregate value of N728.979bn and would be implemented in two tranches, Tranche A and Tranche B.
The industry expert said the increased participation reflected growing confidence in the programme and its ability to provide a credible framework for addressing verified outstanding obligations in the electricity sector.
The NBET boss said: “The increased participation is a positive development and reflects the growing confidence of stakeholders in the program and its ability to provide a credible framework for addressing verified outstanding obligations to the sector.
“It is, therefore, important that the Debt Reduction Program is viewed not simply as an initiative for settling historical debt, but also as part of a broader effort to restore financial confidence, liquidity and sustainability to the Nigerian electricity supply industry.
“The increased participation is a positive development and reflects the growing confidence of stakeholders in the program and its ability to provide a credible framework for addressing verified outstanding obligations to the sector.
“It is therefore important that the Debt Reduction Program is viewed not simply as an initiative for settling historical debt, but also as part of a broader effort to restore financial confidence, liquidity and sustainability to the Nigerian electricity supply industry”, Odeyemi added.
In her remarks, the Special Adviser to the President on Energy, Olu Verheijen, said the first issuance had demonstrated the viability of the debt reduction model, resulting in the settlement agreements with 11 GenCos operating 21 power plants.
She further clarified: “Now we are moving deeper into implementation with Series 2. As I said at the investor forum in July, Series 1 proved the model and Series 2 is scaling it. As important as it is, you would agree that scaling is what truly makes the difference,”
In his speech which focused on the overview of the programme, the representative of Cardinal Stone, the lead issuing house and financial adviser to the transaction, Michael Nwezi, said the programme reflected what can be achieved when the government and organized private sector operators collaborate on a shared national objective by bringing structured confidence and long-term financing to a complex sectoral challenge.
The investment expert explained: “This is by far the largest fund issuance in the history of the Nigerian capital market. Across the two series, the transaction attracted participation across a broad investor base, including pension fund administrators, banks, sovereign wealth funds, asset managers, and other institutional and retail investors.”
It would be recalled that the N4tn Power Sector Multi-Instrument Issuance Programme was approved by the Federal Executive Council (FEC) at its August 2025 meeting to address verified legacy obligations owed to power generation companies and gas suppliers.
Specifically, the programme was introduced to improve liquidity, strengthen investor confidence and support sustainable electricity generation by resolving unpaid debt of the GenCos accumulated over several years.
The Federal Government has said the broader objective is to settle legitimate legacy debts owed the GenCos and also implementing reforms to improve revenue accruals, reduce technical and commercial losses, and avert future recurrence of unpaid obligations in the nation’s electricity industry value chain.
