FG to launch N1.23trn power sector bond to address GENCOs’ debt

By Obas Esiedesa, Abuja

ABUJA — The Federal Government has finalised plans to launch a N1.23 trillion Power Sector Bond, part of a broader N4 trillion debt programme aimed at restoring liquidity, stabilising the electricity market, and rebuilding investor confidence, the Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, has said.

As of June 2025, the government owed power generation companies about N6 trillion in unpaid electricity subsidies. To reduce this liability, officials have engaged with the companies to forfeit roughly 50 percent of the debt.

Edun made the remarks at an Investor Forum organised by the Presidential Power Sector Debt Reduction Committee (PPSDRC) in collaboration with transaction advisers, ahead of the Phase 1 issuance of the bond, which is backed by a sovereign guarantee from the Federal Government.

The forum, hosted by NBET and CardinalStone Partners Limited, attracted over 650 participants, including pension fund administrators, banks, asset managers, insurance companies, and high-net-worth individuals, many of whom expressed strong interest in participating.

The Minister confirmed that the bond is structured to meet global best practices and attract long-term institutional investors, particularly pension funds. It qualifies for Central Bank of Nigeria (CBN) liquidity status and has secured exemption from the National Pension Commission (PenCom), making it eligible for investment by Pension Fund Administrators.

“This initiative strengthens market transparency, encourages competition, and promotes private sector participation, which accounts for about 90 percent of the economy,” Edun said. He emphasised that the government prefers market-based financing solutions over printing money or other unsustainable funding methods.

The bond programme is designed to resolve legacy debts in the Nigerian Electricity Supply Industry (NESI) while laying the foundation for a more efficient, self-sustaining power market.

Earlier, the Special Adviser to the President on Energy, Mrs. Olu Verheijen, noted that debt clearance must be accompanied by financial and structural reforms to prevent future liabilities.

The Acting Managing Director of NBET, Mr. Johnson Akinnawo, described the programme as a “strategic reset” for the power sector rather than a bailout. “The sovereign guarantee of the Federal Government is the unwavering support that ensures this initiative will grow into opportunities powering industries, homes, and dreams,” he said.

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