The Federal Government of Nigeria has successfully raised ₦501 billion through the capital market under the Presidential Power Sector Debt Reduction Programme (PPSDRP), marking a key milestone in addressing the over ₦4 trillion legacy debt owed to power generation companies (GenCos).
The funds were mobilized via the issuance of Series 1 Power Sector Bonds by NBET Finance Company Plc, a special purpose vehicle sponsored by the Nigerian Bulk Electricity Trading Plc (NBET).
The issuance comprised two components:
₦300 billion raised from investors in the open market (Tranche A) and ₦201 billion in bonds directly allotted to participating GenCos (Tranche B). Both tranches were structured as 7-year bonds with a 17.50% coupon rate.
Fully guaranteed by the Federal Government, the bond recorded 100% subscription, drawing strong participation from pension funds, banks, asset managers, and other institutional investors.
This reflects robust confidence in the government's reform agenda for the power sector.The initiative forms part of a broader multi-tranche programme authorised to issue up to ₦4 trillion in government-backed bonds.
It targets verified legacy arrears for electricity supplied by GenCos from February 2015 to March 2025, aiming to restore liquidity, enable better maintenance and operations, and encourage new investments in generation capacity.
To date, five GenCos, representing 14 power plants nationwide have signed settlement agreements with NBET: First Independent Power Limited (FIPL), Geregu Power Plc, Ibom Power Company Limited, Mabon Limited, and Niger Delta Power Holding Company Limited (NDPHC). Fourteen generation companies overall participated in the deal, hailing it as a game-changer that will alleviate the sector's chronic liquidity crisis.
Officials describe the programme as a decisive reset for Nigeria's electricity market, combining structured debt resolution with wider financial and structural reforms. When fully implemented, it is projected to impact over 4,483.60 megawatt-hours per hour of generation capacity, settle payments for approximately 290,645 gigawatt-hours of billed electricity since 2015, and support reliable power delivery to about 12.03 million active customers nationwide.
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