By Erewunmi Peace

The Federal Government of Nigeria has issued a ₦501 billion bond aimed at addressing longstanding financial challenges in the country’s electricity sector. This initiative is part of a broader strategy to restore confidence, improve liquidity, and resolve outstanding debts owed to power generation companies (GenCos).

The bond, issued under the Presidential Power Sector Debt Reduction Programme (PPSDRP), is designed to settle legacy payment arrears across the electricity value chain, a challenge that has historically weakened the sector and discouraged investment.

Officials report that the bond was fully subscribed, with investors including pension funds, banks, and asset managers, signaling strong market confidence in the government’s reform plan.

The move is expected to:

• Clear years of unpaid electricity bills owed to GenCos.
• Restore liquidity in the power market.
• Encourage further private sector investment in Nigeria’s electricity sector.

The ₦501 billion issuance is the first tranche of a wider financial strategy, which could eventually include up to ₦4 trillion in bonds to fully address legacy debts across the sector. Analysts view this as a significant fiscal reset that could strengthen the electricity market and improve power supply reliability nationwide.