Grid Collapses, FG Issues N501bn Power Sector Bond For Debt Clearance

Abuja — Barely hours after Nigeria’s national power grid collapsed for the second time this January, the Federal Government on Tuesday rolled out a ₦501 billion financial intervention. It is an inaugural bond under the Presidential Power Sector Debt Reduction Programme (PPSDRP).

The bond is designed to clear long-standing legacy debts in the electricity sector. More so, it is aimed at restoring liquidity, rebuilding investor confidence and stabilising the Nigerian Electricity Supply Industry (NESI).

Key stakeholders involved in the issuance disclosed that the bond achieved 100 per cent subscription. Pension funds, banks, asset managers and other institutional investors engaged with it.

The bond issuance comes amid growing public concern over repeated grid collapses, underscoring the urgency of structural reforms and sustained investment to stabilise Nigeria’s power infrastructure.

Additionally, power generation companies (GenCos) and distribution companies (DisCos) have complained of an unsustainable debt burden for years now. President Bola Ahmed Tinubu pledged to confront this challenge as part of broader power sector reforms.

Outstanding payment arrears owed to GenCos for more than a decade have strained liquidity, weakened balance sheets and discouraged fresh investment across the electricity value chain.

Speaking at the bond issuance signing ceremony in Lagos, the Special Adviser to the President on Energy, Mrs. Olu Arowolo Verheijen, described the programme as a decisive reset of the electricity market.

According to her, the initiative combines debt resolution with wider financial and structural reforms necessary to put the sector on a sustainable footing.

The signing followed the successful completion of Series 1 of the Power Sector Bond Issuance by NBET Finance Company Plc. Proceeds from the Series 1 issuance will be used to fund the first and second instalment payments to participating GenCos with signed settlement agreements.

This initial phase is estimated at ₦421.42 billion, representing about 50 per cent of the total negotiated settlement amount. It will be paid through a combination of cash and notes.