The Federal Government of Nigeria has successfully issued a ₦501 billion inaugural bond under the Presidential Power Sector Debt Reduction Programme (PPSDRP), recording 100 per cent subscription from pension funds, banks, asset managers and other institutional investors.
The fully subscribed bond marks a major milestone in the Federal Government’s efforts to resolve legacy debts in the power sector, restore liquidity and strengthen investor confidence in the Nigerian Electricity Supply Industry (NESI).
The Programme, championed by President Bola Tinubu, is aimed at addressing long-standing payment arrears owed to power generation companies (GenCos), which for more than a decade have constrained liquidity, weakened balance sheets and discouraged investment across the power sector value chain.
Speaking at the bond issuance signing ceremony held in Lagos on Monday, 27 January 2026, the Special Adviser to the President on Energy, Mrs. Olu Arowolo Verheijen, described the Programme as a decisive reset of the electricity market, combining debt resolution with broader financial and structural reforms.
The bond issuance followed the successful completion of Series 1 Power Sector Bond Issuance by NBET Finance Company Plc. The Series 1 issuance closed at ₦501 billion, comprising ₦300 billion raised from the capital market and ₦201 billion in bonds allotted to participating power generation companies, reflecting strong investor confidence in the Federal Government’s reform agenda.
Under the Programme, verified receivables for electricity supplied between February 2015 and March 2025 are being settled through negotiated agreements with GenCos. So far, five power generation companies — First Independent Power Limited (FIPL), Geregu Power Plc, Ibom Power Company Limited, Mabon Limited and Niger Delta Power Holding Company Limited (NDPHC) — representing fourteen power plants nationwide, have executed Settlement Agreements with the Nigerian Bulk Electricity Trading Plc (NBET).
The total negotiated settlement amount for the five companies stands at ₦827.16 billion, to be paid in four phased instalments.
Proceeds from the Series 1 bond issuance will be used to fund the first and second instalment payments to participating GenCos with signed Settlement Agreements. These payments, estimated at ₦421.42 billion, represent about 50 per cent of the total negotiated settlement amount and will be made through a combination of cash and notes.
Reacting to the development, Group Managing Director of Sahara Power Group, Mr. Kola Adesina, said the Programme had restored confidence and unlocked the pathway for new investments in the sector.
“Capital formation can only come when there is confidence and a clear line of sight for recovering investments previously made,” Adesina said. “Because we were being owed so much, it was difficult to put in more money. But based on President Bola Ahmed Tinubu’s commitment to resolving these legacy issues, once this process is completed, construction will commence immediately on the second phase of our Egbin Power Plant.”
He thanked the President on behalf of power generation companies for the resolution of the long-standing debt challenges.
By clearing historic arrears, the PPSDRP is expected to improve liquidity for power generation companies, strengthen their capacity to meet operating and debt obligations, unlock new investments across the electricity value chain and support more reliable power supply to homes and businesses. The Programme also reinforces fiscal discipline through validated claims, negotiated settlements and transparent capital market financing.
When fully completed, the Programme is expected to impact 4,483.60MWh/h of electricity generation capacity by Nigerian GenCos and finalise settlement of payments for 290,644.84GWh of electricity billed since February 2015. It is also expected to provide a strong foundation for capacity expansion and new investments by companies serving over 12.03 million active registered electricity customers nationwide.
Verheijen acknowledged the leadership of President Bola Ahmed Tinubu and the support of 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 Programme a reality. She also commended members of the Presidential Power Sector Debt Reduction Committee, key power sector stakeholders and government institutions, including the Debt Management Office, the Central Bank of Nigeria, the National Pensions Commission and the Nigerian Revenue Service, for their roles in the successful bond issuance.
CardinalStone Partners Limited served as Lead Financial Adviser and Lead Issuing House to the transaction, leading a consortium of professional advisers, while NBET acted as Sponsor, working closely with the Office of the Special Adviser to the President on Energy, which led settlement negotiations with power generation companies.
Reaffirming the Federal Government’s commitment, Verheijen said the administration would ensure disciplined implementation of the Programme and encouraged other power generation companies to participate as part of broader reforms aimed at building a financially sustainable electricity market capable of supporting Nigeria’s long-term economic growth.