FG Completes N1.23tn Bond Issuance to Address Power Sector Debt Crisis

The Federal Government has completed the first phase of its debt settlement initiative in the power sector by raising N728.9 billion through a second bond issuance. The bonds, issued by the Nigerian Bulk Electricity Trading Plc Finance Company, were formally signed off in Abuja after receiving regulatory approval.

This second tranche combines with an earlier N501 billion bond issued in January 2026 to bring total funds mobilised under Phase 1 to approximately N1.23 trillion. The bond issuance targets verified outstanding debts owed to electricity generation companies, which have struggled with liquidity constraints due to government arrears.

The second series attracted participation from 11 generation companies, an increase from the eight that participated in the first bond offering. Finance Minister Taiwo Oyedele stressed during proceedings that debt repayment alone would not stabilise the electricity market, and that structural reforms must accompany any financial intervention.

The N1.23 trillion raised under Phase 1 represents roughly 30 percent of the total N4 trillion in legacy obligations accumulated in Nigeria's power sector. The remaining balance will likely require additional financing mechanisms beyond the current phase, though no timeline for Phase 2 has been announced by government authorities.

The bonds are designed to restore confidence among power sector investors and improve cash flow to generation companies that supply electricity to the national grid. According to the Nigerian Bulk Electricity Trading Plc, the Series 2 bond was launched in August 2026 and has been implemented across two tranches.

The CEO of NBET disclosed that 11 generation firms committed to the latest tranche, indicating sustained interest from the industry in resolving accumulated payment disputes with government.