The Federal Government has taken another major step towards addressing the longstanding financial challenges in Nigeria’s electricity sector with the formal signing of financing documents for a N728.9 billion power sector bond aimed at offsetting part of the debts owed to electricity generation companies (Gencos).
The signing ceremony, held in Abuja, marked the completion of the Series 2 Tranche B issuance under the Presidential Power Sector Debt Reduction Programme. The latest transaction brings the total value of power-sector bond issuances to N1.23 trillion within nine months, underscoring the government’s commitment to restoring financial stability to the electricity market.
Speaking at the event, the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, stressed that settling outstanding debts alone would not solve the structural problems affecting the sector. He said the intervention must be accompanied by reforms designed to improve efficiency, transparency and revenue generation across the electricity value chain.
“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.
The bond package comprises N402 billion in cash bonds raised from the capital market and N326.9 billion in non-cash bonds allocated to participating generation companies. The initiative forms part of broader efforts by the government to reduce the estimated N4 trillion debt burden accumulated within the power sector.
Industry stakeholders have repeatedly warned that unresolved debts owed to generation companies have weakened investments, constrained operations and contributed to persistent challenges in electricity supply across the country.
Chief Executive Officer of Nigerian Bulk Electricity Trading Plc (NBET), Akin Odeyemi, described the issuance as a significant milestone in efforts to address the financial difficulties facing the electricity supply industry. According to him, improving liquidity in the market remains critical to attracting investment and enhancing service delivery.
The power sector has struggled for years with inadequate infrastructure, poor revenue collection, energy theft and mounting debts among operators. Successive administrations have introduced various interventions aimed at improving performance and ensuring sustainability.
Analysts say the effectiveness of the latest bond programme will depend largely on the implementation of wider reforms targeted at strengthening market discipline and improving operational efficiency. They argue that while debt resolution is necessary, lasting improvements in electricity supply will require sustained investments, regulatory compliance and stronger accountability throughout the sector.
