Federal Government don sign financing documents for N728.9 billion Series 2 power sector bond. The signing ceremony happen for Abuja, and e complete transaction wey dem design to settle part of N4 trillion wey government dey owe electricity market.
The ceremony formalise financing arrangement after approval don already secure for Series 2 Tranche B of the bond, following earlier issuance of Series 2 Tranche A. The two power-sector bond issuances now reach combined N1.23 trillion within nine months. Government say na effort to address legacy debts and restore financial stability to electricity market.
Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, talk say debt settlement alone no go solve the underlying problems for power sector. He insist say financing intervention must waka with reforms wey go improve market sustainability. According to am, the N728.9 billion power sector bond must come with stronger market discipline and structural reforms to stop the legacy debts wey don weaken Nigeria electricity market from coming back.
Oyedele say the transaction get N402 billion cash bonds wey dem raise from capital market and N326.9 billion non-cash bonds wey dem allot to participating Generation Companies under Presidential Power Sector Debt Reduction Programme. He say the transaction address accumulated legacy obligations wey weaken liquidity, constrain investment and affect confidence across electricity value chain. But he stress say settling debts no go enough without reforms to tackle wetin dey cause fresh debt accumulation.
He talk say the bond programme no fit stand alone. E must come with stronger market discipline, better revenue assurance, reduction in technical and commercial losses, greater efficiency and accountability across electricity ecosystem. He say Federal Government objective na to resolve legitimate legacy obligations in structured and transparent manner while implementing reforms necessary to prevent their recurrence. He add say Nigeria dey leverage domestic capital markets. The transaction show how government fit use market instruments to address economic challenges while deepening financial markets and mobilising long-term domestic capital.
Oyedele also talk say ultimate measure of the programme no be the size of bonds issued. E go measure whether the market achieve financially sustainable electricity market wey can attract investments, meet obligations and deliver more reliable power to Nigerian households and businesses.
Earlier, Chief Executive Officer of Nigerian Bulk Electricity Trading Plc, Akin Odeyemi, describe Series 2 issuance as another important milestone for Federal Government efforts to address longstanding financial challenges confronting electricity supply industry. He say dem go implement the issue in two tranches, with 11 generation companies participating, compared with eight under Series 1. He say the increased participation reflect growing confidence in the programme and its ability to provide credible framework for addressing verified outstanding obligations to generation companies.
Odeyemi talk say accumulated obligations don affect ability of market participants to meet their commitments and constrain capacity of generation companies to invest in additional generation capacity. He say the programme should be viewed beyond settlement of historical debts. According to am, financial challenges for power sector get implications across electricity value chain. He add say the programme no be simply initiative for settling historical debt, but part of efforts to restore financial confidence, liquidity and sustainability to Nigerian electricity supply industry.
Managing Director of CardinalStone Partners, Michael Nwezi, give overview of project. He say completion of first phase of N4 trillion programme significant not only for power sector but also for development of Nigeria capital markets. Nwezi say first phase value reach N1.23 trillion and dem structure am into two issuances: Series 1 wey close at N501 billion in January 2026, and Series 2 wey raise N729 billion. He say the two issuances don raise combined N1.23 trillion within nine months.
According to Nwezi, Series 1 serve as important test and show say market willing to support well-structured instrument despite complexities around power sector. He talk say success of Series 1 lead to better outing on second issuance. He describe Series 2 transaction as largest fund issuance in history of Nigerian capital market. E attract participation from pension fund administrators, banks, sovereign wealth funds, asset managers and other institutional and retail investors. Nwezi say strong investor response show confidence in structure, repayment framework and economic potential of programme. He talk say investor engagement reinforce point say capital dey available and investors willing to finance transformational projects when dem get sufficient visibility, transparency and confidence around offering. He add say completion of Series 2 mark conclusion of first phase, and work expected to begin soon on second phase.
Special Adviser to the President on Power, Dr. Lanre Babalola, talk say issuance represent important step in restoring commercial stability to Nigeria electricity sector. Babalola say electricity market don carry substantial legacy obligations for years, and e weaken market participants, constrain investments and undermine confidence across value chain. He warn say debt resolution alone no be sector reform. He talk say Federal Government recognise say dem no fit build electricity market of future while still carry unresolved obligations from past. But he add say dem must equally recognise say debt resolution by itself no be sector reform.
Babalola say government must address causes of new debt accumulation through improved payment and revenue collection, reduction in technical, commercial and collection losses, accelerated metering and tariffs wey increasingly reflect efficient costs while protecting consumers. He talk say objective na power sector wey can pay bills, attract investment and expand reliable electricity supply without requiring government financial intervention.
Director-General of Bureau of Public Enterprises, Ayodeji Gbeleyi, talk say Series 2 issuance represent another significant step towards addressing verified legacy obligations owed to generation companies, restoring liquidity and boosting investor confidence. Gbeleyi say successful payment of first principal component of Series 1 bond wey fall due in July 2026 na another important milestone. E show Federal Government commitment to meeting obligations under programme. He talk say objective of intervention no be simply to settle old debts but to create financial conditions for healthier electricity market. He add say complementary interventions dey also pursued in distribution segment to improve metering, revenue assurance, network performance and reduce aggregate technical, commercial and collection losses.
Representing Gencos, Sahara Group Chief Executive Officer, Kola Adesina, describe intervention as significant confidence-building measure. Adesina talk say government no just dey settle historical debts; e dey restore liquidity and rebuild investor confidence across electricity value chain, from gas supply and generation to transmission and distribution. He talk say industry must now respond with performance. He add say improved liquidity must translate into greater generation availability, stronger networks, reduced losses, improved collections, increased investment and ultimately more reliable electricity for Nigerian homes and businesses. Adesina talk say government intervention no fit replace commercial discipline. He stress say sustainable future of sector must base on accountability, cost-reflective economics, sanctity of contracts and market where every participant meet obligations.
