A ₦728.9 billion second-series bond has pushed the Federal Government’s power-sector debt-reduction programme to approximately ₦1.23 trillion, bringing fresh liquidity to generation companies burdened by years of unpaid electricity receivables.
The Series 2 issuance by NBET Finance Company Plc brings total funding raised under the Presidential Power Sector Financial Reforms Programme (PPSFRP) to ₦1.23 trillion, following the ₦501 billion inaugural Series 1 transaction completed in January 2026.
Africa Finance Corporation (AFC), which served as co-financial adviser on both transactions, said the latest issuance represents another step towards resolving legacy liabilities that have constrained liquidity across Nigeria’s electricity value chain.
The programme targets up to ₦4 trillion through a multi-instrument issuance structure.
Proceeds from the Series 2 transaction will be used to settle verified, overdue receivables owed to electricity generation companies (GenCos) for power supplied between February 2015 and March 2025.
The debt build-up has left GenCos carrying receivables on their balance sheets, limiting their ability to meet obligations to gas suppliers, maintain generating plants and finance additional capacity.
Akin Odeyemi, managing director and chief executive officer of Nigerian Bulk Electricity Trading (NBET) Plc, said the latest issuance would convert more of those outstanding claims into liquidity across the electricity supply chain.
“For too long, verified receivables have sat on GenCos’ balance sheets, limiting their ability to pay gas suppliers, maintain plants and invest in new capacity,” Odeyemi said.
The Series 2 transaction was oversubscribed, attracting pension fund administrators, banks, sovereign wealth funds and asset managers, according to AFC.
The investor response provides a domestic capital-market channel for financing obligations that have accumulated over more than a decade.
The programme also received a boost in July 2026 when the Federal Government made the first coupon and principal instalment on the Series 1 bonds in full and on schedule.
Banji Fehintola, executive board member and head of financial services at AFC, said the completion of the second issuance within eight months of the first demonstrated progress in converting verified legacy obligations into investable securities.
“Verified legacy obligations are being converted into transparent, investable instruments, and domestic investors are backing that approach,” Fehintola said.
AFC worked with CardinalStone Partners as co-financial adviser on the Series 2 transaction, supporting negotiations and settlement agreements with additional GenCos, structuring the cash and non-cash components and engaging investors ahead of the offer.
When fully implemented, the debt-reduction programme is expected to affect 5,398MW of generation capacity operated by Nigerian GenCos.
The programme is also intended to settle payments relating to 290,644.84 gigawatt-hours of electricity billed since February 2015, according to the transaction announcement.
The affected generation companies supply a market serving about 12 million active registered customers.
The government is betting that clearing the verified arrears will improve the financial position of generators and create room for investment in plant maintenance, gas supply and additional generating capacity.
The debt programme is being overseen by the Presidential Power Sector Debt Reduction Committee, with technical leadership from the Office of the Special Adviser to the President on Power.
Implementation is being carried out through NBET’s special-purpose vehicle, NBET Finance Company Plc.
The bond programme forms part of a government strategy to restructure Nigeria’s electricity market.
The government is pairing the power-sector debt clean-up with investments in transmission and metering and a transition towards bilateral electricity trading at market-reflective prices, in an effort to improve the conditions for private capital.
The strategy is aimed at giving generation companies greater liquidity while addressing the financial uncertainty that has discouraged investment across the electricity value chain.
The effectiveness of the approach will ultimately depend on whether the restructuring of legacy debt translates into stronger sector finances and new investment in generation capacity.
