FG Signs N728.9bn Power Bond to Address Electricity Debt

On [date not specified], the Federal Government of Nigeria signed the financing documents for a N728.9 billion Series 2 power sector bond in Abuja, aimed at settling part of its N4 trillion outstanding obligations to the electricity market. This signing formalized the financing arrangement after prior approval for Series 2 Tranche B, following the earlier issuance of Series 2 Tranche A.

The total value of the two bond issuances now stands at N1.23 trillion within nine months. Finance Minister Taiwo Oyedele stated that while debt settlement is crucial, it must be supported by reforms to ensure market sustainability.

The bond transaction includes N402 billion in cash bonds and N326.9 billion in non-cash bonds allocated to Generation Companies (Gencos) under the Presidential Power Sector Debt Reduction Programme (PPSDRP). Oyedele stressed that the bond program must be coupled with stronger market discipline and structural reforms to prevent future debt accumulation, aiming for a financially sustainable electricity market.