The Federal Government has raised about ₦1.23 trillion through two bond issuances. The money will tackle part of the ₦4 trillion legacy debt owed to electricity Generation Companies (GenCos). Akin Odeyemi, CEO of Nigerian Bulk Electricity Trading Plc (NBET), disclosed this in Abuja on Monday. The latest Series 2 issuance raised ₦728.9 billion. Series 1 raised ₦501 billion in January. Series 2 involved 11 GenCos, up from eight in Series 1.
Nigeria’s power sector privatisation in 2013 left a legacy of unpaid debts. GenCos sold power to NBET, which struggled to collect from distribution companies. The debt pile grew. In 2021, the government intervened with a ₦600 billion loan. It did not solve the problem. The current bond programme is the latest attempt.
Odeyemi said the Series 2 bond will be in two tranches. Finance Minister Taiwo Oyedele said ₦402 billion is cash bonds and ₦326.9 billion is non-cash. He said the programme must be accompanied by reforms. “The bond programme cannot stand alone,” he said. He called for market discipline, revenue assurance and reduced losses. Power Minister Joseph Tegbe said the initiative supports stable electricity. Olu Verheijen, Special Adviser on Oil and Gas, said Series 1 proved the model and Series 2 scales it.
Winners: GenCos, which get paid. NBET, which reduces its debt. Domestic capital markets, which absorb the bonds. Losers: Taxpayers, who ultimately service the debt. Consumers, who may not see improved supply. Future governments, who inherit the obligation if reforms fail.
Bottom Line: ₦1.23 trillion is a large sum. It settles old debts. It does not fix the losses that created them.