The Federal Government is set to issue a second bond valued at approximately N729 billion to electricity generation companies (GenCos) as part of its ongoing efforts to clear long-standing debts and improve financial stability across Nigeria’s power sector.
The planned issuance forms part of the Presidential Power Sector Debt Reduction Programme, a N4 trillion initiative approved by President Bola Ahmed Tinubu to address verified legacy debts owed to operators in the Nigerian Electricity Supply Industry (NESI).
According to the Nigerian Bulk Electricity Trading Plc (NBET), the new bond will complete the first phase of the debt reduction programme, which is valued at N1.23 trillion.
The second bond issuance is expected to follow an Investors’ Forum scheduled for this week and comes months after the successful issuance of a N501 billion Series 1 bond in January 2026.
Together, the two bond issuances will provide much-needed financial relief to electricity generation companies that have struggled for years with liquidity constraints caused by unpaid invoices and accumulated debts.
The Federal Government believes settling these obligations will strengthen the financial health of the electricity value chain, improve investor confidence and support more reliable electricity generation across the country.
In a statement released on Sunday, NBET said the initiative demonstrates the government’s commitment to addressing longstanding financial challenges affecting the power sector.
The agency explained that improved liquidity would enable generation companies to meet their operational obligations, invest in infrastructure upgrades and sustain electricity production.
NBET also disclosed that the first coupon and principal repayment on the Series 1 bond, which matured on July 14, 2026, was paid in full and on schedule.
According to the agency, the successful repayment sends a strong signal to investors that the Federal Government remains committed to honouring its financial obligations under the programme.
For years, Nigeria’s electricity industry has been burdened by mounting debts arising from inadequate tariff recovery, market inefficiencies and funding shortfalls.
These financial challenges have affected the ability of electricity generation companies to maintain infrastructure, procure gas supplies and invest in expanding generation capacity.
Industry experts say the debt reduction programme represents one of the most significant financial interventions in the Nigerian electricity sector in recent years.
They believe that clearing verified debts will improve confidence among investors and lenders while creating a more sustainable financial framework for electricity generation and distribution.
Analysts also note that resolving liquidity challenges is essential to attracting new investment into Nigeria’s power sector, which remains critical to industrialisation, economic growth and improved service delivery.
While stakeholders have welcomed the government’s intervention, many insist that debt repayment alone will not resolve the sector’s structural challenges.
They argue that broader reforms, including cost-reflective tariffs, improved revenue collection, enhanced transmission infrastructure and stronger market discipline, will be necessary to ensure long-term sustainability.
Nevertheless, the planned N729 billion bond issuance marks another significant step in the Federal Government’s efforts to restore financial stability and strengthen confidence in Nigeria’s electricity industry.
