Nigeria Clears N501bn Electricity Debt, Boosts Investor Confidence

The Nigerian government has successfully cleared a significant N501 billion electricity debt, enhancing investor confidence and indicating a positive shift towards stability in the power sector. This achievement was made possible through the issuance of the first-ever bond dedicated to settling historical power sector debts.

The Presidential Power Sector Debt Reduction Program saw full subscription, marking a crucial step in addressing the longstanding challenges in Nigeria's electricity generation. The bond issuance, totaling N300 billion, with an additional N201 billion allocated directly to power generation companies, aims to target 14 power plants operated by five generating firms.

The settlement process, which began in February 2015 and concluded in March 2025, involved negotiations across companies, resulting in a total payable amount of N827.16 billion. The funds from the bond issuance will cover approximately half of the outstanding obligations, with the rest to be settled through a mix of cash payments and promissory notes.

This initiative is expected to unlock investments, restore confidence in Nigeria's electricity market, and ultimately improve service delivery to over 12 million registered customers.