The Federal Government has raised N728.979 billion through the second issuance under its N4 trillion Power Sector Multi-Instrument Issuance Programme, lifting the total value of bonds issued in the first phase of the initiative to about N1.23 trillion.
The latest sale is intended to settle verified outstanding debts owed to electricity generation companies. Unpaid claims have weakened liquidity and limited investment across the power sector.
Second Series Follows Successful Debut
The Series 2 bond follows the completion of the inaugural N501.021 billion Series 1 issuance in January 2026. That first bond was fully subscribed, with N300 billion raised from the capital market and N201.021 billion issued as non-cash bonds to participating generation companies.
The new transaction comprises N402 billion in cash bonds raised from the capital market and N326.979 billion in non-cash bonds allotted to participating GenCos under the Presidential Power Sector Debt Reduction Programme.
Minister Stresses Need for Reforms
Speaking at the signing ceremony in Abuja on Monday, the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, said the deal was designed to tackle the legacy obligations that had undermined the electricity market.
“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,” he said.
“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.”
Oyedele warned that the bond programme alone would not be enough. It must be backed by reforms capable of stopping new debts from building up, with the aim of creating a financially sustainable electricity market.
“This means the bond programme 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,” he said.
He also highlighted the use of Nigeria’s domestic capital markets. “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 mobilizing long-term domestic capital.”
Success, he added, would not be judged by the size of the bond but by its effect on power supply and the ability of market participants to meet their obligations.
“Ultimately, the success of this programme will not be measured by the amount or size of the bond that we have issued. 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,” Oyedele stated.
More GenCos Join Second Phase
The Chief Executive Officer of the Nigerian Bulk Electricity Trading Plc, Akinola Odeyemi, said the Series 2 bond has an aggregate value of N728.979 billion and will be implemented in two tranches, Tranche A and Tranche B.
He disclosed that 11 generation companies are taking part in the second phase, up from eight under Series 1. Odeyemi said the broader participation reflected growing confidence in the programme and its ability to provide a credible framework for resolving verified outstanding obligations in the electricity sector.
