The Federal Government has announced plans to raise about N729 billion through a second bond issuance aimed at settling verified legacy debts in Nigeria’s electricity sector.
The Series II offering under the Power Sector Multi-Instrument Issuance Programme is scheduled to open on August 3 and close on August 14, with funding expected to be completed on August 24, subject to regulatory approvals.
The timetable was presented by CardinalStone Partners, the lead issuing house and financial adviser for the transaction.
The planned issuance follows the government’s maiden N501 billion bond programme, through which N300 billion was raised from investors while N201 billion was issued as non-cash instruments to eligible power sector beneficiaries.
Speaking at the NBET Finance Company Plc Series II Bond Investors’ Forum in Abuja, the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, said the government’s return to the capital market was based on its record of meeting obligations from the first issuance.
Oyedele said persistent financial challenges had weakened the electricity market for years, limiting investment and affecting the performance of the sector.
“For more than a decade, the Nigerian Electricity Supply Industry struggled under persistent tariff shortfalls, settlement gaps within the bulk electricity trading framework, accumulated debts to generation companies and their suppliers, and grid instability, constraining investment and weakening sector performance,” he said.
According to the minister, the challenges required more than government budgetary allocations, prompting the Federal Government to pursue a structured, market-based approach to resolving the sector’s financial problems.
He said President Bola Tinubu subsequently established the Presidential Power Sector Debt Reduction Committee to verify outstanding liabilities and develop a framework for their settlement.
Oyedele explained that while the Federal Executive Council initially approved a settlement ceiling of N4 trillion in August 2025, a detailed verification of claims brought the amount of eligible liabilities down to approximately N3.3 trillion.
He said the verification process involved examining individual claims and matching them with actual services delivered.
Oyedele described the successful completion of the first bond issuance and the payment of its first coupon as evidence of the government’s commitment to its financial obligations.
“In January 2026, the first series of lease-based issuance closed, raising N501bn, with N300bn issued to the market and N201bn issued directly to generation companies and their gas suppliers,” he said.
The minister added that all eight participating generation companies, representing 17 power plants, had received full payment in line with their respective settlement agreements.
He also disclosed that the government paid the first scheduled instalment on the seven-year bond on July 14, describing the payment as timely and complete.
Oyedele said the government was seeking an additional N729 billion through the second series to advance the first phase of its power sector debt settlement programme.
He assured investors that the new instruments would continue to carry the backing of the Federal Government.
CardinalStone Partners said the Series II issuance would comprise approximately N400 billion to be raised through book-building, while another N329 billion would be issued as non-cash instruments to qualified beneficiaries.
The financial adviser noted that pension fund administrators were responsible for roughly half of the cash subscriptions recorded during the first series, while commercial banks accounted for about 41.5 per cent.
Also speaking at the event, the Minister of Power, Joseph Tegbe, said the bond programme should be viewed as part of a wider economic reform strategy rather than simply a fundraising exercise.
“Permit me to begin with a simple proposition. There can be no sustained economic growth without reliable electricity. And there can be no reliable electricity without a financially sustainable market,” Tegbe said.
He said the Federal Government was implementing reforms under the Electricity Act 2023 to develop a more competitive and investment-friendly power market.
However, he identified unresolved historical debts as one of the major challenges preventing new investments from entering the electricity industry.
Tegbe commended investors who participated in the first bond issuance and appealed for continued support for the second tranche, which he said would help advance the government’s electricity sector reforms.
The Special Adviser to the President on Power, Rilwan Lanre Babalola, said the programme was intended to rebuild confidence and restore liquidity within the electricity market.
“Today’s gathering is about far more than the bond issue. It is about restoring confidence in Nigeria’s electricity market. It is about demonstrating that the Federal Government is undertaking deep structural reforms to rebuild the foundations of the Nigerian Electricity Supply Industry,” Babalola said.
He said the reforms were designed to improve liquidity and governance while establishing a transparent and competitive market that could attract sustained private sector investment.
The Federal Executive Council had approved the Power Sector Multi-Instrument Issuance Programme as part of efforts to address legacy financial obligations within the electricity market.
The proposed N729 billion Series II issuance is expected to settle more verified debts, inject additional liquidity into the sector and support the government’s ongoing efforts to reform Nigeria’s electricity industry.
