Nigeria Issues N501bn Bond to Stabilize Power Sector

The Nigerian government is set to issue a N501 billion bond to alleviate the financial challenges faced by the power sector, which has been under severe strain due to unpaid invoices and declining investor confidence. The bond issuance, part of a broader N4 trillion presidential power sector debt reduction program, aims to stabilize operations and potentially improve electricity generation across the country.

The first tranche of the bond, totaling N201.02 billion, will be issued by the Nigerian Bulk Electricity Trading Plc and is backed by a full federal government guarantee. The bond issuance is expected to inject immediate liquidity into the sector, which has been plagued by structural inefficiencies and a significant debt burden exceeding N6 trillion.

Minister of Power Adebayo Adelabu noted that the bond aims to settle verified debts owed to power generation companies and gas suppliers, thereby restoring cash flow and attracting private investment. The first tranche is scheduled for issuance in January 2026 and is anticipated to be oversubscribed.