The Federal Government of Nigeria has successfully issued a ₦501 billion inaugural bond under the Presidential Power Sector Debt Reduction Programme (PPSDRP), achieving 100 per cent subscription from pension funds, banks, asset managers and other institutional investors. The development marks a major step towards resolving long-standing legacy debts in the Nigerian Electricity Supply Industry (NESI), restoring liquidity across the value chain and rebuilding investor confidence in the power sector.
The Programme, championed by President Bola Ahmed Tinubu, GCFR, is aimed at addressing payment arrears owed to power generation companies, which for more than a decade constrained liquidity, weakened company balance sheets and discouraged new investments in electricity generation, transmission and distribution. These challenges had continued to affect power supply reliability and limited the sector’s ability to expand capacity.
Speaking at the bond issuance signing ceremony held in Lagos on 27 January 2026, the Special Adviser to the President on Energy, Olu Arowolo Verheijen, said the Programme represents a decisive reset of the electricity market. According to her, the initiative combines debt resolution with broader financial and structural reforms designed to put the sector on a sustainable path.
She explained that the signing followed the successful completion of the 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 markets and ₦201 billion in bonds allotted directly to participating power generation companies. This structure, she noted, reflects strong investor confidence in the Federal Government’s power sector 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. So far, five power generation companies representing fourteen power plants across the country have executed Settlement Agreements with the Nigerian Bulk Electricity Trading Plc (NBET). The companies are First Independent Power Limited (FIPL), Geregu Power Plc, Ibom Power Company Limited, Mabon Limited and Niger Delta Power Holding Company Limited (NDPHC).
The total negotiated settlement amount for these companies stands at ₦827.16 billion, which is 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 power generation companies with signed Settlement Agreements. This initial payment phase is estimated at ₦421.42 billion, representing about 50 per cent of the total negotiated settlement amount, and will be made through a combination of cash payments and notes.
Reacting to the development, Mr. Kola Adesina, Group Managing Director of Sahara Power Group, which owns five power plants, said the bond issuance restores confidence needed for new investments. He 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.”
By clearing historic arrears, the Programme is expected to improve liquidity for power generation companies, strengthen their ability to meet operating and debt obligations, and unlock new investments across the sector. The Federal Government also expects the initiative to support more reliable electricity supply to households and businesses while reinforcing fiscal discipline through validated claims, negotiated settlements and transparent capital market financing.
When fully completed, the Programme is projected to impact 4,483.60MWh/h of electricity generation capacity by Nigerian generation companies. It will effectively finalise settlement of payments for 290,644.84GWhr of electricity billed since February 2015 and provide a strong foundation for new investments in capacity enhancement and expansion. These improvements are expected to benefit companies serving about 12.03 million active registered electricity customers nationwide.
Verheijen acknowledged the leadership of President Bola Ahmed Tinubu in driving the Programme and also recognised 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 PPSDRP a reality. She also commended members of the Presidential Power Sector Debt Reduction Committee for their roles in the successful capital raise.
She further acknowledged the contributions of key government authorities and institutions, including the Debt Management Office, the Central Bank of Nigeria, the National Pensions Commission and the Nigerian Revenue Service, for facilitating critical enhancements that supported the bond issuance process.
CardinalStone Partners Limited served as Lead Financial Adviser and Lead Issuing House for the Series 1 Bond Issue, leading a consortium of appointed professional parties. The firm worked closely with the Nigerian Bulk Electricity Trading Plc, which acted as Sponsor on the transaction, and the Office of the Special Adviser on Energy, which led settlement negotiations and engagements with power 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.”
