The Federal Government has formalised a ₦728.9 billion power sector bond aimed at settling part of its outstanding debt to electricity generation companies.
The financing agreement, signed in Abuja, covers the Series 2 bond under the Presidential Power Sector Debt Reduction Programme.
The latest transaction brings the value of the government’s two power-sector bond issuances to ₦1.23 trillion within nine months.
How the ₦728.9bn Bond Will Be Used
The Series 2 bond consists of ₦402 billion in cash bonds raised through the capital market and ₦326.9 billion in non-cash bonds allocated to participating Generation Companies.
The intervention is designed to address accumulated obligations that have affected liquidity, investment and confidence across the electricity value chain.
Finance Minister Taiwo Oyedele, however, warned that paying the debt alone would not fix Nigeria’s power-sector problems.
He said the bond must be supported by stronger market discipline, improved revenue collection, reduced technical and commercial losses, efficiency and accountability.
“This means the bond programme 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,” Oyedele said.
Oyedele added that the success of the programme would ultimately depend on whether it produces a financially sustainable electricity market capable of attracting investment and providing more reliable power to Nigerians.
The Nigerian Bulk Electricity Trading Plc also described the transaction as an important step towards resolving the longstanding financial challenges in the electricity sector.
