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From Isaac Anumihe, Abuja
The federal government has raised a total of N1.23 trillion through bond issuances to begin settling the estimated N4 trillion owed to electricity generation companies (GenCos), in a move aimed at improving liquidity in Nigeria’s power sector and attracting fresh investment.
The latest issuance of N729 billion, announced on Tuesday, follows the N501 billion bond floated in January. Together, the two make up Series 1 and Series 2 of the government’s Capital Market Multi-Instrument Issuance Programme.
The bond programme is part of ongoing efforts by the Tinubu administration to tackle the long-standing debt burden in the Nigerian Electricity Supply Industry (NESI), which has been blamed for weak investment, poor electricity supply and liquidity challenges across the power value chain.
In July 2024, President Bola Tinubu approved a comprehensive review of liabilities in the power sector and established the Presidential Power Sector Debt Reduction Committee to verify outstanding debts, restore confidence among market participants and develop a sustainable, market-driven debt resolution framework.
Speaking at the bond issuance ceremony, the Minister of Finance and Coordinating Minister of the Economy, Prof. Taiwo Oyedele, said Nigeria’s economy was showing signs of improvement, with the foreign exchange market becoming more stable, government revenues increasing and international credit rating agencies taking notice.
According to him, the next stage of the country’s economic agenda is to drive investment, boost productivity and ensure inclusive prosperity.
He stressed that government resources alone could not fund Nigeria’s huge infrastructure needs, making private sector participation critical.
“We need to finance our growth differently because public resources alone will never be sufficient to meet the scale of infrastructure investment Nigeria requires. Private capital must play a larger role, and our responsibility as government is to create investable opportunities supported by sound policy, credible institutions, and appropriate risk allocation.
“The bond is exactly that model. The government provides the policy framework and the guarantee. The capital market mobilises long-term savings, institutional investors provide patient capital, and the power sector receives the liquidity it needs to grow. Everybody wins,” Oyedele said.
He noted that for more than a decade, the electricity industry had been weighed down by tariff shortfalls, payment gaps, mounting debts owed to GenCos and their suppliers, as well as persistent grid instability.
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According to him, these structural problems require market-based solutions rather than relying solely on budgetary allocations.
“Electricity is the infrastructure of prosperity. No nation has achieved sustained industrialisation without reliable electricity. Factories cannot manufacture without power. Hospitals cannot function effectively. Schools cannot embrace digital learning technology. Companies cannot scale, and agriculture cannot maximise productivity.
“Reliable electricity is not merely another infrastructure asset, it is the infrastructure upon which every sector depends. If we decide to create jobs, which we do; expand manufacturing, and accelerate digital transformation, we must be deliberate about fixing the challenges of our power sector,” he said.
Also speaking, the Minister of Power, Joseph Tegbe, disclosed that the N501 billion Series 1 bond issued earlier this year was oversubscribed, reflecting growing investor confidence in the government’s power sector reforms.
He said the Federal Government remained committed to transforming the electricity sector into a commercially viable and investment-grade industry through the implementation of the Electricity Act 2023.
“Many of you in this room subscribed to the ₦501 billion Series 1 issuance. In fact, it was oversubscribed. The federal government has been very unequivocal in its commitment to reposition the power sector as a commercially-viable and investment-grade industry.
“We are fostering a more competitive electricity market and partnerships between national and state governments. We are expanding transmission infrastructure. We are accelerating renewable energy deployment. We are strengthening regulatory certainty and improving governance across the value chain. These reforms are already changing the investment narrative,” Tegbe said.
The Managing Director and Chief Executive Officer of the Nigerian Bulk Electricity Trading Company (NBET), Johnson Akinnawo, said the newly issued N729 billion Series 2 bond was built on the same principles of transparency and accountability that guided the first issuance.
“Series two of the bond approximated at ₦729 billion carries the same discipline, the same rigour, and the same humility that Series 1 bore because raising capital is the easier part.
“Stewarding it with integrity is the harder and ongoing work, and we do not take it lightly,” he said.
The Federal Government expects the bond programme to reduce the financial burden on electricity generation companies, restore confidence in the power market and support efforts to improve electricity supply across the country.
