FG to raise N729bn in second power sector bond tranche
The Federal Government has announced plans to raise about N729 billion through the second tranche of its Power Sector Multi-Instrument Issuance Programme to settle verified legacy debts in Nigeria’s electricity sector.
The bond offer is scheduled to open on August 3 and close on August 14, with funding expected to be completed by August 24, subject to regulatory approvals.
The announcement was made at the NBET Finance Company Plc Series II Bond Investors’ Forum in Abuja, where the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, said the government was returning to the capital market after successfully meeting its obligations under the first series.
The maiden Series I issuance raised N501 billion, comprising N300 billion from investors and N201 billion in non-cash instruments issued directly to eligible generation companies and their gas suppliers.
Oyedele said all eight participating generation companies, representing 17 power plants, had been fully paid in line with their settlement agreements. He added that the government also made the first scheduled payment on the seven-year bond on July 14, 2026, on time.
He said the electricity sector had been weakened by years of underinvestment, tariff shortfalls, liquidity challenges, accumulated debts and grid instability.
According to him, the Federal Executive Council had initially approved a settlement ceiling of N4 trillion under the Power Sector Debt Reduction Initiative. However, a line-by-line verification of claims reduced the eligible liabilities to approximately N3.3 trillion.
Oyedele said the proposed Series II issuance would raise about N729 billion to advance the first phase of the debt settlement programme, assuring investors that the instruments would continue to enjoy Federal Government backing.
CardinalStone Partners, the lead issuing house and financial adviser, said approximately N400 billion would be raised through book-building, while N329 billion would be issued as non-cash instruments to eligible beneficiaries.
The Minister of Power, Joseph Tegbe, described the bond programme as part of broader economic reforms aimed at creating a financially sustainable electricity market.
Tegbe said unresolved legacy debts remained a major barrier to attracting fresh investment into the sector, adding that the government was implementing reforms under the Electricity Act 2023 to establish a competitive and investment-driven electricity market.
The Special Adviser to the President on Power, Rilwan Lanre Babalola, said the programme was designed to restore confidence and liquidity in the electricity market while improving governance and creating conditions for long-term private investment.
The Federal Government said the proposed N729 billion Series II bond would help settle additional verified obligations, deepen liquidity and support ongoing reforms in the electricity sector.
