The federal government has issued a new N728. 97 billion series 2 bond aimed at settling the legacy debts owed to Generation Companies (GenCos) under the $4 trillion multi-instrument issuance programme.
The total sum comprises N402 billion in cash bonds raised from the capital markets and N326.9 billion in non-cash bonds allotted to participating generation companies under the Presidential Power Sector Debt Reduction Program. covering 11 generation companies.
Speaking at the signing ceremony in Abuja on Monday, Taiwo Oyedele, Nigeria’s minister of Finance and Coordinating Minister of the Economy, emphasised that the 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.
According to him, 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.
He said, ‘This means the bond program 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. 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 mobilising long-term domestic capital.’
Oyedele stressed the need for a financially sustainable electricity market that can attract investments, meet its obligations and deliver more reliable power to Nigerian households and businesses.
‘Our task from here on is to ensure disciplined implementation and sustain the broader reforms required to build an electricity market capable of supporting Nigeria’s growth and industrialisation,’ he added.
In his remarks, Akinola Odeyemi, CEO, Nigerian Bulk Electricity Trading plc (NBET), said that the signing of the bond is in furtherance of the federal government’s efforts to address the long-standing financial challenges confronting the Nigerian electricity supply industry and to strengthen the foundation for a more sustainable and reliable power sector.
He explained that the series 2 builds on the successful completion of Series 1 of the program, which was concluded in January 2026 with an issue size of N501 billion and the participation of eight generation companies.
‘The program provides a structural and market-aligned mechanism for the settlement of verified legacy debt owed to the generation companies while also seeking to improve investor confidence, strengthen integrity, and support the sustainable development of the Nigerian power sector.
‘The successful completion of Series 1 was an important achievement. It demonstrated the commitment of the Federal Government and all participating stakeholders to finding practical and sustainable solutions to the financial challenges affecting the power sector. We have now progressed to Series 2, which was launched in August 2026 and represents a further significant step in the implementation of the program,’ he said.
Noting that the accumulation of outstanding obligations affects the ability of market participants to meet their commitments and constrains the capacity of generation companies to make further investments to increase their electricity generation capacity, Odeyemi said that the Debt reduction program is therefore not simply an initiative for settling historical debt, but also as part of a broader effort to restore financial confidence, liquidity and sustainability to the Nigerian electricity supply industry.
Giving an overview of the program, Michael Nwezi, of Cardinal Stone, lead issuing house and financial adviser, said that by bringing structured confidence and long-term financing to a complex sectoral challenge, the program reflects what can be achieved when public sector leadership and private sector capital align behind a shared national objective.
‘The programme itself is a 4 trillion naira programme, with phase 1 sized at N1.23 trillion, structured into two issuances: series 1, which happened in January, and series 2, which we are signing today. Series 1 closed at N501 billion, and series 1 was an important test, a very important and important test of the programme.
‘It demonstrated that even in the face of complexities within the sector, the market is willing to support a well-structured instrument with clearly defined repayment mechanisms and appropriate investor protections. The success of the series 1 led us to even better outing on this second issuance. This series 2, which we are signing today, raised a total of N729 billion.
‘This is by far the largest fund issuance in the entire history of the Nigerian capital market. Across the two series, the transaction attracted participation across a broad investor base, including pension fund administrators, banks, sovereign wealth funds, asset managers, and other institutional and retail investors.
‘This transaction continues to set the bar of how much we can utilise capital market solutions to support economic development, and we are proud to have led and supported it,’ he said.