FG launches ₦729bn bond to settle GenCo debts
The Federal Government is set to open a ₦729 billion bond on August 3 under the Presidential Power Sector Debt Reduction Program, as part of a renewed push to settle verified debts owed to GenCos.
The Federal Government is set to open a ₦729 billion Series II bond offer on 3 August 2026 under its Presidential Power Sector Debt Reduction Programme. The initiative aims to settle verified legacy debts owed to electricity Generation Companies (GenCos) and restore liquidity across the Nigerian Electricity Supply Industry (NESI).
The fresh capital follows the government’s initial fund of ₦501 billion raised in the first series rollout and the payment of the first coupon of about ₦63.5 billion on schedule. According to the issuance timeline presented by CardinalStone Partners, the lead financial adviser, the bond offer is expected to open on 3 August and run for 10 business days, closing on 14 August.
Taiwo Oyedele, Nigeria’s Minister of Finance and Coordinating Minister of the Economy, disclosed at the NBET Finance Company Plc Series II Bond Investors’ Forum in Abuja on Tuesday that the government was returning to the capital market only after demonstrating its commitment to honouring financial obligations. “For more than a decade, the Nigerian Electricity Supply Industry struggled under persistent tariff shortfalls, settlement gaps within the bulk electricity trading framework, accumulated debts to generation companies and their suppliers, and grid instability, constraining investment and weakening sector performance. These problems could not be solved by budgetary allocation alone. They require structural, market-based solutions,” Oyedele said.
Olu Verheijen, Special Adviser to the President on Energy, stated that the administration has demonstrated its commitment to making a clean break from the fiscal dysfunction that once defined Nigeria’s power sector. “We are converting yesterday’s liabilities into today’s liquidity and tomorrow’s investment capacity. Markets do not reward promises; they reward performance, and that is why we deliberately chose execution before expansion,” she said.
The first series of the programme paid ₦333 billion to eight participating generation companies covering 17 power plants. Pension fund administrators accounted for about 50% of the cash subscriptions under Series I, while commercial banks contributed about 41.5%, reflecting strong institutional investor confidence.
This mirrors the 2010s power sector reform efforts, which also sought to attract private investment and improve liquidity. The mechanism then was different, but the result was the same: a sector struggling to escape the cycle of debt and underinvestment.
The winners: Generation companies and gas suppliers, who will finally receive payment for services rendered; and the Nigerian electricity sector, which gains much-needed liquidity. The losers: Nigerian consumers, who have borne the cost of the sector’s dysfunction; and the Nigerian government, which must continue to subsidise the sector.
Bottom Line: The government is raising ₦729 billion to settle power sector debts. The first series paid out. The second is coming. The question is whether this will finally fix Nigeria’s power sector or just another stopgap.